MessageBird founder and CEO Robert Vis.
LONDON — Dutch communications software start-up MessageBird said Wednesday that it had raised fresh funding and agreed to acquire commercial email platform SparkPost in a $600 million all-cash deal to help it expand its presence in the United States.
MessageBird, which competes with American cloud communications platform Twilio, says it raised a total of $1 billion in a Series C funding round, $200 million of which was raised last year. The deal, led by Eurazeo, comprised $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 easier for companies to communicate with their customers through a range of channels including SMS, voice and messaging platforms like WhatsApp. The acquisition of SparkPost will add email to MessageBird’s suite of communication tools, as well as top clients like Disney, JPMorgan and Adobe.
Making a big investment like this in email might seem like a kind of return to basics, but MessageBird CEO and founder Robert Vis said it’s still a widely-used method of communication between businesses and their customers.
MessageBird “wants to make communicating with a business to feel as natural as with a friend,” Vis told CNBC in an interview. “And if you define that as texting with a business, where are all the interactions happening today? They’re happening on email.”
Vis said MessageBird signed the deal with SparkPost and raised the additional capital simultaneously, a process that took “roughly 21 days.” The fresh financing was a top-up to its Series C round announced last year and gives the company a valuation of $3.8 billion. MessageBird has raised around $1.1 billion from investors to date.
The firm 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 across four major markets. The combined company will have a total of 25,000 customers and 700 employees, as well as a revenue run rate of $500 million, MessageBird said.
MessageBird has been on a buying spree lately, acquiring Dutch video software firm 24sessions, Atlanta-based customer data platform Hull.io and London-headquartered messaging start-up Pusher for a combined $100 million across multiple deals. The company is loss-making, though Vis says its losses are in the single digits.
Now valued at $3.8 billion, investors are speculating on when MessageBird will enter the public markets.
Twilio, MessageBird’s closest competitor, went public back in 2016. The firm has seen its share price more than triple in the past year and now has a market cap of $67.8 billion, thanks to a pandemic-fueled boom in cloud stocks. Sweden’s Sinch, another listed rival with backing from SoftBank, has climbed by a similar amount year-on-year and is worth roughly $12.1 billion.
“We make decisions at our company based on how we serve our customers,” Vis said. “I can’t find a reason why it would sever my customers better if we were a public company.”
“In order to finance this acquisition, we needed access to capital,” he added. “But the private markets are so insane. Look at us. The amount of capital we’re raising as a European company; you don’t need an IPO to do that. That’s not me pulling away from an IPO. We’ll have the optionality to do it.”
Meanwhile, there have been worries about a potential reversal in stay-at-home trends such as streaming video and conference calls. Netflix, for example, flagged a sharp slowdown in new subscriber registrations in its latest quarterly results, saying it only expects to add 1 million subscribers in the second quarter as economies gradually open back up.
Vis said his firm has been growing “really fast” over the past decade and, though Covid “accelerated requests from customers for more things,” he doesn’t consider MessageBird to be a “Covid-heavy business.”