Zoom Video Communications Inc. (ZM.O) skyrocketed in its trading debut, soaring to more than 16 times its last private valuation and making a billionaire of its founder several times over.

Shares of the San-Jose based video-conferencing service opened at US$65 each, after Zoom sold 20.9 million shares Wednesday to raise US$751 million in its U.S. initial public offering -- the fourth-biggest of the year.

Zoom, which rose as much as 83 percent above its IPO price, was up 76 per cent to US$63.20 at 1:38 p.m. in New York, valuing the company at US$16.2 billion. In its last private funding round in 2017, Zoom’s valuation was about US$1 billion.

The jump in the shares puts Zoom’s valuation above that of two companies that raised more money in their recent IPOs. Tradeweb Markets Inc., which raised US$1.1 billion in the third biggest U.S. listing this year, has climbed 45 per cent since its debut for a total value of about US$8.7 billion. Pinterest Inc., which also started trading Thursday, climbed 26.5 per cent to a market valuation of US$12.7 billion.

At its highest price on Thursday, Zoom even briefly overtook the market valuation of Lyft Inc., the year’s biggest IPO so far. Shares of the ride-hailing company are down 19 per cent since it raised US$2.3 billion in March for a valuation of US$16.7 billion.

Zoom, unlike most of tech unicorns that have gone public or plan to this year, has made a profit. It reported net income of US$7.6 million for the year ended January on revenue of US$331 million, compared with a loss of US$3.8 million a year earlier on revenue of US$151 million.

Zoom’s financials are “one of the most impressive’’ ever seen by D.A. Davidson in an IPO filing, analyst Rishi Jaluria wrote in a note to clients in March. He said at the time that he wouldn’t be surprised if it reached a valuation of US$10 billion to US$15 billion on its first day as a public company.

The company has said its mission is to make video communication “frictionless,” as more employees work remotely and use conferencing services to connect with coworkers. International Data Corp. has estimated that the segments of the market in which Zoom operates could be worth as much as US$43.1 billion by 2022, according to a regulatory filing.

Its customers include Uber, which averaged 14 million minutes per month spent in Zoom meetings in 2018, as well as media company Discovery Inc. and software maker VMware Inc.

Risk Factors

Still, the business isn’t without risks. Though the standard disclaimer in many IPO documents -- that the company may never be profitable -- is missing, Zoom cited increased competition, service outages and cybersecurity threats as concerns that investors should be aware of, acknowledging that its security measures have been compromised in the past and could be again.

Zoom also noted its large research and development operations in China, where it employed more than 500 people as of January. This, it said, could expose the company to “market scrutiny regarding the integrity of our solution or data security features,” especially against the backdrop of the Trump administration’s continued efforts to close a trade deal with China.

The offering was led by Morgan Stanley, JPMorgan Chase & Co., Goldman Sachs Group Inc. and Credit Suisse Group AG. The stock is trading on the Nasdaq Global Select Market under the ticker ZM.