The cofounder of BlueJeans says the the coronavirus crisis accelerated its $500 million acquisition by Verizon, and predicts there's more 'consolidation of video platforms' to come

Blue Jeans Network

Blue Jeans Network Cofounder Krish Ramakrishnan

• On Thursday morning, Verizon announced its intent to acquire videoconferencing company BlueJeans in a deal said to be valued at about $500 million.
• BlueJeans cofounder Krish Ramakrishnan, executive chairman, said his company had been exploring a merger with Verizon when the coronavirus crisis hit. That convinced the two companies to work faster on the merger.
• "Imagine a transaction of this nature just done on video when everybody is working from home," Ramakrishnan told Business Insider. "Even the due diligence was done from home. Never happened. We got it done last night at 12:10 AM."
• Verizon's acquisition of BlueJeans combines a major telecommunications network with one of the most widely-used video conferencing platforms - even as it faces competition from Microsoft, Cisco, and upstarts like Zoom.
• Ramakrishan predicts a consolidation in the videoconferencing space as the sudden pivot to a remote workforce highlights the importance of the technology.
• Click here for more BI Prime stories.

On Thursday, Verizon announced its intent to acquire BlueJeans Network, a videoconferencing company first founded in 2009.

BlueJeans cofounder and Executive Chairman Krish Ramakrishnan said the startup had been exploring a possible sale to Verizon for months.

The coronavirus crisis forced the two companies to work faster on a merger, which they completed the way corporate deals are now done in the age of COVID-19.

"Imagine a transaction of this nature just done on video when everybody is working from home," Ramakrishnan told Business Insider. "Even the due diligence was done from home. Never happened. We got it done last night at 12:10 AM."

The merger, which Ramakrishnan said was worth about $500 million, underscores the heightened importance of videoconferencing platforms given the sudden rise of the remote workforce. In its lifespan, BlueJeans had raised some $175 million from investors including New Enterprise Associates, Accel, and even baseball legend Derek Jeter.

BlueJeans will become a division of Verizon. Ramakrishnan said he will continue with his current role, which is focused on product innovation and strategy. There will be no layoffs at BlueJeans, he said: "That is the promise."

The rise of videoconferencing

BlueJeans competes with other fast-growing platforms such as Zoom, Microsoft Teams, and Google Hangouts which have seen a spike in user traffic after the pandemic forced millions of employees worldwide to work from home.

"We had, I kid you not, 300% increase in video traffic and usage in just three months," Ramakrishnan said.

So why sell now?

"It's a tough decision," he said. "You always want to continue by yourself, to take it to the next level, and build and build and build."

But it also became clear that being part of Verizon would give BlueJeans access to a "huge sales team" and cutting edge 5G and edge computing technologies. Ramakrishnan said merger discussions had been going on for some months when the pandemic hit.

"I was afraid the talks would break down because of the shutdown," he said.

Industry consolidation

But the opposite happened, he said. The talks "accelerated because of the use case of everybody working from home."

"Until now, work from home was a convenience that people thought was okay for certain people," he said. "What this pandemic has taught is lots of people can actually work from home. It's going to be the new norm."

Video conferencing clearly will become a more widely used technology which Ramakrishnan said will lead to a big shift in the industry, exemplified by the Verizon-BlueJeans merger.

"Definitely, there's going to be consolidation," he said. "There's going to be consolidation on the video platform and maybe adjacent telephony platforms because everything is about collaboration. And I think it's going to happen because of this work from home phenomenon."

Why BlueJeans?

For Ramakrishnan, the Verizon merger marks the end of the journey of a startup he launched 11 years ago, when video conferencing was still an unfamiliar tool for many people.

He wanted to change that, and even the name he picked for the startup underscored his goal of coming up with a product that would be "easy to use, easy to approach, and something very familiar for everybody."

"I came up with 'BlueJeans,'" he said. "It's casual. And you can actually go in style if you wear a jacket. It fits the enterprise, as well as work from home. You just need a clean shirt or something. So it applies to all situations. And universally, the most loved fabric is denim. Everybody likes blue jeans."

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