Twilio’s $3.2 Billion Takeover



API Companies Grow Through Acquisitions

API companies Twilio (TWLO) and Segment will join forces in a $3.2 billion deal. The merger was rumored to be in the works over the weekend and was confirmed on Monday morning. Twilio will acquire Segment using its Class A common stock by the end of the year. After the announcement, Twilio’s stock jumped over 7% on Monday.

“By joining forces and applying our customer data platform to Twilio’s engagement cloud, we’ll be able to make the entire customer experience seamless from end-to-end,” Segment CEO Peter Reinhardt said in a statement. Reinhardt said the deal will help Segment speed up its growth by “five to 10 years.”

Twilio Spends Record Amount

For the first 10 years after its 2008 launch, Twilio focused on communications services. In 2018, it pivoted to the cloud with the launch of its Flex customer service API and with the acquisition of email marketing API company SendGrid. Now, Twilio will be able to use Segment’s customer data with SendGrid and Flex to help companies understand even more about their customers.

Twilio paid a premium for this power. Segment is the eighth company Twilio has acquired, but this deal will close for over $1 billion more than what it paid for SendGrid. However, it’s projecting the big price tag will pay off. In an investor presentation, Twilio said the Segment purchase will grow its total addressable market, or TAM, by $17 billion.

Cloud Companies Expand in Pandemic Market

The pandemic has increased the value of companies like Segment, which gathers customer data from a bunch of different sources and then pulls all of that information into a single view.

Since the start of COVID-19, it’s been more than just businesses that need to communicate with customers online. As schools and non-profit organizations shift their operations to the internet, the demand for cloud software has skyrocketed.

The BVP Nasdaq Emerging Cloud Index, which tracks publicly traded software companies like Twilio, has grown 82.8% in 2020. Twilio shares have ballooned by 235% so far this year.


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS101303


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.


TLS 1.2 Encrypted
Equal Housing Lender