The deal unites two large players in the digital comms space, albeit with differing focuses. Sendgrid is best-known for its email focus. Twilio, in contrast, came to fame fighting players like Nexmo in its fight to own API-powered telephony capabilities. Think the sorts of texts that you get for two-factor password confirmations or what Uber sends your phone. Uber has lessened its dependence on Twilio , dinging its stock price for a time.
As a public company, Twilio has excelled. However, Twilio has long been overdependent on a few customers deriving a large portion of its top line. Enter Sendgrid, which, as a company, is nearly ironic. Email is supposed to be dead now. Everyone has taken a shot, even Facebook. And yet email is a key distribution platform for everyone. The question is whether Twilio is overpaying for Sendgrid.
While Twilio grew 54 percent in its last quarter, compared to its year-ago quarter, Sendgrid grew a still-respectable 32 percent. In its last earnings report, Sendgrid also raised its forecast. For over 2. Since its inception, the company has processed over a trillion emails.
SendGrid was incubated through the TechStars accelerator program. It also upsized its IPO, selling an additional 1. It also may use a portion of the net proceeds to make acquisitions. In June , it had acquired Message Bus to expand its customer base. SendGrid's successful IPO has definitely proven them wrong. I feel its fundamentals are far better than overhyped and overfunded companies like Blue Apron APRN that are struggling to find viable business models. SendGrid, however, also faces significant risks.
Lower-priced competitors with much lower cost structures could come in and take market share away in its core products. Also, the company needs to expand its product line to be able to deliver satisfactory growth quarter after quarter in the public market that tends to be quite merciless.
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And Sendgrid, before the deal was announced, was only up a little over a quarter from its IPO price ($24 to. ketor.xyz › news › twilio-snags-sendgrid-for-2b-adding-email-. SendGrid, the Denver-based marketing email company, raised $ million after pricing its IPO at $16, above the expected range of $ to.