Zoom’s 484% Surge Gives Early Investor ‘Mad Money’

Zoom’s 484% Surge Gives Early Investor ‘Mad Money’
  • Samuel Chen acquired his initial stake almost a decade ago
  • Taiwan native built an initial fortune with ink-trading business
  • Shares of Zoom, which recently reported a 170% increase in first-quarter revenue, have more than quintupled since their initial public offering last year
  • His Digital Mobile Venture Ltd., which participated in Zoom’s early funding rounds, controls a $1.6 billion stake
  • Chen’s investment firm has already sold some Zoom shares, including a $22 million chunk at Zoom’s April 2019 IPO and an additional 13 million shares through March, according to a filing.
  • Chen’s investment firm has sold a total of $35 million chunks of Zoom shares according to a filing.
  • Chen's investment could have earned a windfall of as much as $2.1 billion.

 

The way you behave on the soccer field is very important,

 

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Samuel Chen can finally add nine digits to his name, thanks to an investment he made on a sharing platform that had no buzz over a decade ago.

The Taiwanese investor who dabbled into wealth initially through ink trading started putting money in the sharing platform unbeknownst to him that investment would change his life ten years later.

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Let the numbers do the talking

His Digital Mobile Venture Ltd., which participated in Zoom’s early funding rounds, controls a $1.6 billion stake, assuming it hasn’t sold stock since the holding was last disclosed at the end of March.

Shares of Zoom, which recently reported a 170% increase in first-quarter revenue, have more than quintupled since their initial public offering last year.

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Chen is also a board member of Taiwan circuit maker Sonix Technology Co., and Digital Mobile is the biggest shareholder of Santa Clara, California-based Telenav Inc., a maker of navigation software.

Concerning the Zoom investment, Samuel Chen attributes it’s success to luck and his melancholic demeanor rebuffs any media exposure.

Chen can thank Telenav Chief Executive Officer H.P. Jin, who introduced him to Yuan, according to a person familiar with the relationship.

He keeps a low profile and doesn’t give interviews. Shumin Huang, a spokeswoman for Sonix, said.

Yuan the founder of the Zoom app conducted himself on the football pitch in an exemplary manner which attracted the early investors, they invested in his character before they vibed with the sharing platform said Jin.

“The way you behave on the soccer field is very important,” said Jin, who estimates his Zoom stake is worth more than $100 million.

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There’s still money to be made in the stock

Chen’s investment firm has already sold some Zoom shares, including a $22 million chunk at Zoom’s April 2019 IPO and an additional 13 million shares through March, according to a filing. That means it could have earned a windfall of as much as $2.1 billion.

Chen and other investors made initial investments in Zoom in 2011, according to a post last year on Medium by Louis Li of venture-capital firm TSVC, formerly known as TEEC Angel Fund.

A year later, as Zoom burned through its seed funding and few venture-capital funds showed interest, Chen stepped in to lead a series A round.

The investor, now in his late 60s, left Zoom’s board in 2018, four years after Digit Mobile Inc., a Taiwan-based company where he serves as chairman, brought the service to the island.

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Concerns over its security practices have put the sharing platform in the fray, prompting the company to bolster protective measures for users. There are also questions of the longevity of the brand post-pandemic.

On the other hand, Zoom’s cloud-based phone offering is a “significant opportunity” that could set it up as a unified communications provider, Alex Zukin, an analyst at RBC Capital Markets, said in a note to clients this week in which he upgraded the shares to a buy.

Chen, who received a bachelor’s degree in chemistry from Taiwan’s National Tsing Hua University, earned his early fortune through a business trading ink, according to a book on successful former students published to celebrate the college’s 100th anniversary.

- With Bloomberg