Twilio Inc. (NYSE:TWLO) had a good quarter delivering 77% revenue but their stock plunged from $115 to $105 in a single trading session at the heel of the $2 billion dollar acquisition of SendGrid. Twilio helps app developers use push technology to better connect to their customers like the text messages received from Airbnb.
The merger to enhance delivery of services
In an interview with Jim Cramer, the CEO of Twilio and SendGrid gave insight on the deal. SendGrid’s CEO, Sameer Dholakia, indicated that the $2 billion dollar acquisition from Twilio is a “one plus one equals five” scenario as the merger of the companies will enhance their operations in delivering better services to their customers.
He added that they will serve companies such as Airbnb and the additional 140,000 better under the umbrella of Twilio. The companies will nonetheless need the ability to orchestrate their communications in a variety of ways to engage customers through different channels. However, since Airbnb was a customer of both SendGrid and Twilio before the acquisition SendGrid will have the responsibility of streamlining their booking process.
In the new arrangement when customers will be making reservations for a stay they will get the confirmation of the reservation in the mailbox which shall be delivered by Send Grid.
More companies coming on board
Twilio had a string quarter growing their year-over-year revenue by 77% by doubling down on the utility of its expanding platform. Twilio co-founder and CEO, Jeff Lawson indicated that the communications software that they employ is not just used by tech giants such as Uber and Airbnb but many more. He stated that the company is seeing more companies seeking capability and beyond tech companies.
Mr. Lawson indicated that in their call they had requests from Ecolab, Stanley Black and Decker and ETrade which is running the gamut. He added that every company regardless of the size or age requires great customer engagement for them to succeed.
Although the acquisition initially received resistance from the investors the company’s stock has recovered and in the last trading session, they were up 0.37% to close at $107.