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Twilio pays $3.2B for data platform SegmentTwilio pays $3.2B for data platform Segment

Cloud platform Twilio, hot on the heels of acquiring SendGrid, now is buying the customer data platform Segment too.

Pádraig Belton

October 12, 2020

3 Min Read
Twilio pays $3.2B for data platform Segment

It's early in the shopping season, but cloud communications platform Twilio plans to acquire customer data platform Segment for a cool $3.2 billion.

Segment, founded in San Francisco in 2012, raised $175 million in an April 2019 fundraising round and has been open to acquisition offers.

Twilio, for its part, has a current market capitalization of $43.83 billion, after seeing its share price triple in the year to date. It acquired SendGrid, an email API platform, in February 2019 for $3 billion, so buying big seems part of its style.

Both Twilio and Segment revolve around APIs, application programming interfaces, letting developers easily access functions and data on offer from other sources. "We power the communications, but we don't actually know who the customers are," its Chief Executive Jeff Lawson told Forbes, explaining the match between the two.

So call center operators could more quickly bring up what a customer had bought and when, and which channels they prefer to use to communicate.

This deal will now give Twilio extra "insight into the way customers interact across every channel," Lawson tweeted, adding in a press release about the acquisition that data silos "destroy great customer experiences."

Segment will continue as a business unit within Twilio following the all-stock deal, with Twilio gradually incorporating its features into its own platform. Both boards have approved the purchase, which the companies expect to close in the fourth quarter following regulatory approvals.

Segment has won backing from some of the bigger names in venture capital, including Accel, Thrive Capital and Google Ventures. Its chief executive, Peter Reinhardt, began studying at MIT in 2008 and still lists himself on LinkedIn as "on leave to start Segment."

Cloud communications platforms generally have prospered during the coronavirus pandemic.

Amsterdam-based MessageBird, billed as "Europe's answer to Twilio," has seen its value reach $3 billion. Both companies have experienced a demand surge during COVID-19.

New York City said in late May it was using Twilio to power its contact-tracing initiative. The company built a coronavirus contact center using its Twilio Flex programmable platform to call, message and email patients and their known contacts.

Cloud communications is a field Microsoft has sought to elbow its way into, too. Satya Nadella's Redmond tech giant launched its Azure Communications Services last month, playing up in doing so the recent popularity of its Teams hub. ("Declaring War on Twilio" was how the press reported that move.)

Twilio has had robust form in acquisitions previously, too. It bought a Prague-based speech analytics firm called Ytica in 2018, a Swedish SMS provider called Beepsend in 2017, the team behind an open source web real-time-communications project in 2016, and a two-factor authentication service called Authy in 2015.

"Twilio has been a smart acquirer," and this deal now positions it as a legitimate cloud data platform, said Peter Wagner, founding partner of Wing Venture Capital, in a tweet.

— Padraig Belton, contributing editor, special to Light Reading

About the Author(s)

Pádraig Belton

Contributor, Light Reading

Contributor, Light Reading

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