Verizon Communications Inc. today announced plans to buy Blue Jeans Network Inc., better known as BlueJeans, a videoconferencing provider whose products compete with Zoom and Microsoft Teams.

The carrier didn’t disclose how much it’s spending on the acquisition. But CNBC reported that the deal is valued at around $400 million, while the Wall Street Journal pegged the price tag at “less than $500 million,” citing a source.

Mountain View, California-based BlueJeans claims more than 15,000 customers across its videoconferencing products and passed the $100 million recurring annual revenue mark in early 2019. In December, Chief Executive Officer Quentin Gallivan penned a blog post revealing that the company was on track to become profitable within a few months. He also disclosed BlueJeans made a “strategic decision to optimize resources” to expedite its climb out of the red, a decision that reportedly involved extensive layoffs.

The $400 million or so Verizon is said to be shelling out may represent a discount to BlueJeans’ last private valuation. The company was worth “just under” $500 million after a 2013 funding round and in 2015 raised another investment that may have pushed its valuation even higher. Even so, a $400 million acquisition price could still mean a substantial return for BlueJeans’ outside investors, which have injected about $175 million into the company.

As for Verizon, the carrier is gaining a suite of enterprise-grade videoconferencing tools it can use to address the soaring demand for communications products among businesses. Zoom Video Communications Inc., Slack Technologies Inc. and Microsoft Corp. have all seen demand for their communications products surge amid the coronavirus pandemic, with Zoom alone reporting a 2,000% jump in peak daily active users.

BlueJeans’ flagship product, Meetings, is a business videoconferencing platform that allows users to join a meeting from their browser, mobile device or desktop. The company also provides a version of the platform that runs on meeting room devices such as conference phones and offers Events, a tool for hosting webcasts with up to 50,000 participants. 

This broad feature set should allow Verizon to target a wide cross-section of organizations and use cases when upselling BlueJeans’ products to its business customers. The carrier didn’t go into too much detail about its plans, saying only that BlueJeans will be “deeply integrated into Verizon’s 5G product roadmap.” It’s possible Verizon is planning to bundle the company’s videoconferencing tools with certain 5G wireless plans for businesses. 

The deal is expected to close in the second quarter. BlueJeans’ founders, “key management team” and employees will all join Verizon once the transaction wraps up.

Photo: Verizon