Twilio to acquire SendGrid for $2 billion, expanding its developer-focused communication platform

Publicly-traded cloud communications platform Twilio saidit will acquire Denver-based interactive email provider SendGrid in an all stock deal valued at roughly $2 billion.

The acquisition adds email to the other communications channels that Twilio’s API already supports, such as voice, SMS, chat and messaging apps.

SendGrid has “taken the same developer-first approach as we have — building a great API, reducing friction to getting started, focusing on trust and quality and showing developers what’s possible with the power of code,” Twilio CEO Jeff Larson said.

Twilio is making a huge investment in SendGrid, paying more than its market value as of Monday of $1.43 billion. Since the announcement, Twilio’s stock has dropped 2.68 points; SendGrid was down 1.73 at press time.

SendGrid serves 74,000 customers and says that 50 percent of the world’s email addresses were sent an email through SendGrid in the past 12 months. The company went public in November 2017.

Why you should care

Customers are increasingly demanding a single point of access, or a unified platform, for their marketing tools. Larson says that this move will provide Twilio customers with a single platform through which to access all of their communication tactics.

“Joining Twilio will allow us to accelerate our journey toward a shared vision of offering one trusted platform to fuel the future of customer communications,” SendGrid CEO Sameer Dholakia said in a letter to employees filed with the SEC. “Today’s announcement will enhance our brand among developers, give us immediate scale, and expand opportunities to cross sell and invest.”

This is the second email acquisition announced within a week. Last week, Salesforce bought interactive email services startup Rebel to add to its Marketing Cloud.

More on the acquisition

1. Dholakia said he will stay in his role

2. SendGrid will be an autonomous division of Twilio

3. Twilio expects the transaction to formally close in the first half of 2019.

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