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Why Twilio is Acquiring SendGrid for $2 Billion

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Why Twilio is Acquiring SendGrid  for $2 Billion

Last week Twilio announced it was expanding its communications platform beyond voice and text messaging by snapping up email delivery specialists SendGrid.

The $2 billion all-stock deal, which is expected to close next year, comes in the run-up to Twilio’s annual developer conference and represents the company’s biggest acquisition to date.

It also signals that email — which has been pronounced dead as often as the web itself — is still very much alive.

Aren’t you the messaging people? 🤔

You may be surprised to see me tip my hat to a channel apart from messaging — but then again, this is an email newsletter.

People will send and receive 281 billion emails per day in 2018, according to the latest email statistics report, and that includes teenagers.

It’s no surprise that email remains the dominant digital marketing channel, but
marketing emails make up only a portion of those we receive from businesses every day.

Far more ubiquitous are what’s known as “transactional emails” — shipping updates, password resets, boarding passes, receipts and other boring but vital notifications.

These are the emails SendGrid specializes in getting delivered.

The new inbox 📭

Of course, these kinds of notifications aren’t just sent via email anymore. As I’ve noted before, the A2P SMS market is a $70 billion industry. A2P stands for “application to person” because these messages are sent programmatically from a business’ notification system, as opposed to a human agent or chatbot.

With the recently-released WhatsApp Business API, Facebook is looking to take a slice of the A2P messaging pie away from SMS and the telcos who profit off it.

This in turn has led global telcos to join forces with Google in its campaign to make RCS (Rich Communication Services) the new text messaging standard and heir apparent to SMS (which stands for Short Message Service).

The theory is that if they can offer a more modern messaging experience through RCS, businesses and consumers will be less likely to choose third-party messaging apps like WhatsApp, Facebook Messenger and Apple Business Chat (which is linked to iMessage) for their business messaging needs.

Assuming that ship hasn’t already sailed.

No more noreply ⛔️

There’s one major difference between business notifications sent via email or SMS and those sent via WhatsApp.

When a business emails or texts a boarding pass, for example, no one is going to respond to that automated and anonymous message. But because notifications sent on WhatsApp will come from a verified business identity they know and trust, users will have a natural tendency to reply.

Indeed, if the user has already interacted with the business over chat, it will appear in the very same conversation thread. Question is, will businesses have the context and tools they need to respond?

In the business messaging world, a notification is no longer just a notification — it's an invitation to an ongoing conversation with customers. They better be ready when customers accept the invite.


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