agreed to acquire a software provider that focuses on helping businesses track and manage customer data, a $3.2 billion deal that comes as companies rethink how they reach consumers who are spending more time at home during the Covid-19 pandemic.
Twilio struck an all-stock deal for Segment, which offers products that allow companies to glean data about shoppers from websites, mobile apps and email, as well as when they communicate with customer support, and from various software programs.
“What Segment allows companies to do is take all the data that’s in these disparate systems and assemble them together into one view of the customer. Once you have that one view, then you can use it to power more effective communications,” Twilio Chief Executive Jeff Lawson said in an interview.
Like many other software companies that sell to other businesses, San Francisco-based Twilio isn’t widely known among consumers, but millions of people interact with its software when they tap popular services.
Twilio’s product suite is aimed at software developers, who use its tools to create various services for companies, like sending out alerts for flight delays or enabling secure communications between people who have met through a dating website. It also has offerings, like messaging and video capabilities, aimed at improving companies’ customer-support centers.
Uber Technologies Inc.
uses its text-messaging service to give customers information about drivers, such as how far away they are, a Twilio spokeswoman said.
WhatsApp generates a significant source of its revenue, Twilio said in its latest annual report.
Shares of the company have more than tripled since the start of the year, rising an additional 7.2% early Monday afternoon to $328.24. The increase reflects investor expectations that demand for its products will grow, as companies look to better communicate with customers who are spending more time at home and ordering more items digitally, according to Rishi Jaluria, an analyst at D.A. Davidson.
“With the pandemic, they’ve gotten some nice tailwinds,” he said.
Revenue at Twilio for the first half of the year rose to $765.7 million from $508.2 million for the same period in 2019. The company’s loss widened to $194.7 million from $129.1 million.
Active-customer accounts rose to 200,000 as of the end of the second quarter, from about 162,000 the year earlier.
Segment, which has nearly 570 employees, was last valued at $1.5 billion after a funding round in April 2019, according to PitchBook. The company said last month it has more than 20,000 customers globally.
The acquisition is expected to be completed in the fourth quarter, and Segment will operate as a division of Twilio. Over time, Twilio will look to integrate parts of Segment’s product offerings with its own to better pitch business customers, Mr. Lawson said.
Twilio completed a public offering in 2016 and has acquired other companies in recent years. In 2019, it completed a deal for SendGrid, which helps businesses reach customers via email.
Write to Micah Maidenberg at [email protected]
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Appeared in the October 13, 2020, print edition as ‘Twilio to Buy Software Firm That Manages Customer Data.’