SEG’s 2Q20 SaaS M&A Report recently highlighted the notable acquisition of BlueJeans by Verizon. BlueJeans is a B2B videoconferencing platform popular among the enterprise segment. Verizon completed the acquisition in record time, wrapping up the deal four weeks after announcing in mid-April.
Similar to its public counterpart, Zoom Video Communications Inc (NASDAQ: ZM) which over the last year has seen its stock price grow nearly 150%), BlueJeans has seen tremendous tailwinds in recent months. The COVID-19 pandemic and shelter in place guidelines have dramatically altered the way many businesses operate. The pandemic forced most to embrace work from home policies.
Many believe these tailwinds will be relatively short-lived and the subsequent growth companies like Zoom have seen, will be temporary. However, in contrast to Zoom, BlueJeans is more focused on the enterprise segment and is hyper focused on security (where Zoom has had its fair share of phishing and “Zoombombing” attacks). These aspects were especially attractive to Verizon, which saw the acquisition of BlueJeans as more strategic than just capitalizing on short-term tailwinds. Verizon saw the enterprise-focused video communications platform as a way to bolster its 5G strategy in multiple use cases. In a blog post by Verizon’s CEO and Co-Founders, the Company wrote the acquisition will help “create compelling innovations to enhance our offering in use cases like telemedicine, distance learning and field service.” It would be no surprise if Verizon continues to capture multiple B2B, enterprise-grade applications to further reinforce its 5G strategy.
The company is already using the acquisition to extend its reach in the highly attractive Indian digital / telecom industry which has seen an influx of investments from global behemoths (e.g. Reliance Jio Platforms has raised more than $15.7 billion in the past 13 weeks from investors like Qualcomm, Intel, Google, and Facebook). Earlier this month, Verizon partnered with Bharti Airtel, an Indian global telecom company, to launch Airtel BlueJeans to gain share in the world’s second largest digital market.
It will be no surprise if Verizon continues to utilize BlueJeans and subsequent acquisitions to continue to gain global 5G market share and secure a competitive edge in the worldwide 5G race.
For more information on recent M&A transactions, please see SEG’s 2Q20 SaaS M&A Update.