Twilio has entered into an agreement to acquire SendGrid, an email API platform. The deal is an all-stock transaction of about $2 billion. This acquisition is on the lines of Twilio’s plan to build the platform as a service system. This system would virtualize the world’s telecoms infrastructure through APIs.
Twilio allows software developers to add capabilities such as voice, video, chat and messaging into their applications. These capabilities are backed by a “Super Network” connecting communications networks. Its services are used by more than 40K companies globally including Airbnb and Netflix.
SendGrid is a digital communications platform enabling businesses to engage with their customers via email. This platform has processed over 45 billion emails each month. It functions mainly for mobile-based customers as well as more traditional enterprises. The list of its customers includes Airbnb, Pandora, Hubspot, Uber as well as traditional enterprises like Taco Bell, Intuit and more.
According to SendGrid’s representative, in the last year, over 50 percent of the world’s email addresses were sent an email by their company.
Benefits to Twilio with this acquisition
With Twilio acquiring SendGrid, the company will now add an email API platform to its cloud communications platform along with others such as voice, video, chat and messaging. The deal between the two companies will now allow Twilio to have an addition of email service in its toolkit that it provides to developers.
Jeff Lawson, CEO, and co-founder of Twilio claimed email is a vital communications channel for companies around the world. So, it becomes vital for them to include this capability in their platform. The CEO proceeded to say, that both the companies share the same model and value. With this acquisition, the two companies together can drive more than 500 billion customer interactions annually.
With the exchange rate of 0.485 shares of Twilio Class A common stock per share of SendGrid common stock, the price equals $36.92 per share. This exchange rate represents a 14% premium over the average exchange ratio preceding the announcement.
Twilio – SendGrid Acquisition
According to the deal, Twilio, will merge with SendGrid, and SendGrid will survive as a wholly-owned subsidiary of Twilio. Both SendGrid and Twilio will report their financial results in the third fiscal quarters. Twilio will also provide a financial guidance for the combined companies.
A representative at Twilio says the deal will add tremendous value to its customer offering. Thus allowing it to provide a single platform to manage all main communication channels, including voice, messaging, video or email.
Both the companies together aim to create powerful communications experiences for businesses. Thus enabling developers to easily embed communications into the software they are building. Their mission is to help customers deliver communications that drive engagement and growth. And this combination will allow them to accelerate that mission for our customers.
This email acquisition follows a similar move from Slack, which last month announced its acquisition of email app provider Astro. Taken together, these moves could be the start of a newfound embrace of the email channel after years of hearing from vendors about email’s inevitable death.
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