As the Covid-19 pandemic grips the world, many businesses are buckling under the strain. Meanwhile, video conferencing company Pexip AS is looking to raise $200m by going public.
Covid-19 is driving growth for this company, particularly given Zoom’s recent security issues.
Pexip has perfect IPO for current times
In the final half of 2019 and first quarter of 2020, IPOs underperformed across Europe. On top of this already undesirable IPO climate, the Covid-19 pandemic hit.
As the pandemic emerged in China in late December 2019, the country began to experience a private investment crisis. January and February saw a 50% fall in venture capital investments compared to the rest of the world. This investment suspension has now spread across the US and Europe.
Any ambitions to go public are highly uncertain at present. However, Pexip appears to be one company that could buck this trend and initiate a successful IPO. The company has already secured backing from four investors totaling approximately NOK1.0bn ($113.6m).
Pexip’s usage has rocketed amid Covid-19
As many countries are on lockdown and engaging in social distancing measures, video conferencing is booming. For a company such as Pexip, the current climate is ideal for IPO.
In April 2020, Pexip announced its first quarter operating results. Contracted revenue for Q1 2020 grew by over 50% compared to one year earlier. Pexip stated that results “are being further spurred by the current Covid-19 situation as more and more companies turn to video communication to enable business continuity.”
Issues at rival firm Zoom have bolstered Pexip’s popularity
Success is also being driven by security concerns with the company’s biggest rival, Zoom. While Zoom has also seen growth amid the Covid-19 crisis, it has been dogged with security issues.
Individuals using Zoom to keep in touch with friends or family may feel less concerned and easily placated by security updates. But for some business users the security concerns pose more of an issue.
The current inability to conduct face-to-face meetings means increasingly sensitive information is being shared over video conferencing software.
Pexip offers something that Zoom cannot; namely security and the ability to conduct business meetings as though they were being done behind closed doors. This is reflected in the high profile clients it attracts, including the US government, Amnesty International, and PayPal.
The company enables businesses to host the video conferencing software themselves. In some cases video meetings can even be carried out without an internet connection.
Growth seen by this company, and the potential it has in the future, mean this IPO will be one of the rare few that come about during this pandemic.