A $ 3.8 billion rival to Twilio in Europe just made a major acquisition to expand in the US

MessageBird founder and CEO Robert Vis.

MessageBird

LONDON – Dutch communications software start-up MessageBird announced on Wednesday that it had raised funds and agreed to acquire SparkPost, a commercial email platform valued at $ 600 million in cash, to expand its presence to expand in the USA.

MessageBird, which competes with the American cloud communication platform Twilio, claims to have raised a total of US $ 1 billion in a Series C financing round, of which US $ 200 million was raised last year. The Eurazeo-led deal included $ 700 million in fresh equity and $ 300 million in debt. Tiger Global, BlackRock and Owl Rock also joined as new investors.

MessageBird’s platform makes it easy for companies to communicate with their customers through a number of channels including SMS, voice and messaging platforms like WhatsApp. The acquisition of SparkPost adds email to MessageBird’s suite of communication tools, as well as to top clients such as Disney, JPMorgan and Adobe.

Making a big investment like this in email seems like a sort of return to basics, but MessageBird CEO and Founder Robert Vis said it was still a widely used method of communication between companies and their customers.

MessageBird “wants to make communication with a company as natural as it is with a friend,” Vis told CNBC in an interview. “And if you define that as SMS with a company, where do all interactions take place today? They take place via email.”

Vis said MessageBird signed the deal with SparkPost while raising the additional capital, a process that took “approximately 21 days”. The new funding was an add-on to the Series C round announced last year and gives the company a valuation of $ 3.8 billion. MessageBird has raised approximately $ 1.1 billion from investors to date.

The company already has a strong presence in Europe, Latin America and Southeast Asia, Vis said, adding that the deal with SparkPost will allow it to split its operations into four main markets. The combined company will have a total of 25,000 customers, 700 employees and a revenue rate of $ 500 million, MessageBird said.

MessageBird has been on a shopping spree recently, acquiring Dutch video software company 24sessions, Atlanta-based customer data platform Hull.io, and London-based messaging start-up Pusher for a total of $ 100 million across multiple deals. The company is making losses, despite Vis saying its losses are in the single digits.

Valued at $ 3.8 billion, investors are speculating when MessageBird will enter the public markets.

Twilio, MessageBird’s closest competitor, went public in 2016. The company more than tripled its share price last year and now has a market cap of $ 67.8 billion thanks to a pandemic-triggered boom in cloud stocks. Sweden’s Sinch, another publicly traded rival backed by SoftBank, is up a similar amount from last year and is valued at around $ 12.1 billion.

“We make decisions in our company based on how we serve our customers,” said Vis. “I can’t find any reason why it would be better to separate my customers if we were a public company.”

“To fund this acquisition, we needed access to capital,” he added. “But the private markets are so crazy. Look at us. The amount of capital we raise as a European company; you don’t need an IPO for that. I’m not withdrawing from an IPO. We will have.” the option to do it. “

Meanwhile, there have been concerns about a possible reversal of trends that stay at home, such as: B. Video streaming and conference calls. Netflix, for example, reported a sharp slowdown in subscriber sign-ups in its latest quarterly results and expects to add just 1 million subscribers in the second quarter as economies gradually reopen.

Vis said his company had grown “very rapidly” over the past decade, and although Covid was “speeding up customer requests for more things,” he did not see MessageBird as a “Covid-heavy business.”

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