Twilio is buying customer data platform startup Segment for $3.2 billion in an all-stock deal

Twilio, a cloud communications provider, confirmed today that is acquiring customer data platform startup Segment for $3.2 billion in Twilio Class A common stock. The deal is expected to close by the fourth quarter of the year. This is Twilio’s second major acquisition. In February 2018, Twilio acquired SendGrid for $2 billion. SendGrid offers companies a cloud-based service for sending emails on a large scale.

Founded in 2011 by Calvin French-Owen, Ian Storm Taylor, Ilya Volodarsky, and Peter Reinhardt, Segment provides the customer data infrastructure that helps businesses put their customers first. Segment provides a single view of the customer by unifying customer’s touchpoints across all platforms and channels.

Segment also enables companies to collect, unify, and connect their first-party to over 200 marketing, analytics, and data warehouse tools. Its software is used by more than 15,000 companies across 71 countries, from fast-growing businesses such as Atlassian, Bonobos, and Instacart to some of the world’s largest organizations like Levi’s, Intuit, and Time.

Earlier this month, Twilio said in a filing that it anticipates more third-quarter revenue than the $401 million to $406 million range it provided in August, sending its stock higher. Analysts polled by Refinitiv had expected $407.9 million in revenue for the third quarter.

Segment also went on social media to share the good news. In a post on Twitter, Segment said: “Big news! Segment is being acquired by  @Twilio . We’re incredibly excited to join forces and build the future of customer engagement, together.”

Big news! Segment is being acquired by @Twilio. We’re incredibly excited to join forces and build the future of customer engagement, together. https://t.co/4Yu925IZsy

— Segment (@segment) October 12, 2020

“Together, Twilio and Segment have an incredible opportunity to build the customer engagement platform of the future,” said Peter Reinhardt, Segment’s co-founder, and CEO. “We created Segment to help businesses set themselves apart in the digital age and deliver rich, connected customer experiences built on high-quality data. 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.”

Before the acquisition, Segment has raised a total of $283.7M in funding over 7 rounds. Its latest funding was raised on April  2, 2019, from a Series D round according to public funding data. Segment is funded by 13 investors. e.ventures and Meritech Capital Partners are the most recent investors. Segment has a post-money valuation in the range of $1B to $10B as of Apr 3, 2019, according to PrivCo.