As the tech sector witnesses sluggish growth, Twilio Inc (NYSE:TWLO) is growing exponentially against expectations. The company’s stock spiraled nearly 300% this year alone dwarfing competitors’ performance in the tech space. Bessemer is set to reap big from its 2009 investment in the then tech startup.
Twilio’s stock performance
In the recent trading session, Twillio’s stock closed at $80.46 against the opening price of $84.49. During the session, the share hit an all-time high of $86.65 and sagged to as low as $76.02 before settling at the aforementioned closing price. Over 7.2 million Twilio shares traded. As of this writing, the stock’s Year to date performance stands at 261.40%. The company prides an annual record high price of $100.47 against an all-time yearly low of $23.25.
Analysts covering the company’s stock have given it an encouraging consensus rating of 1.44 (Under the STRONG BUY) range. Further supporting the stock’s performance is the third quarter earnings where the company posted an impressive $154.3 million in revenue representing a 68% surge.
The revenue was significantly boosted by the company’s existing clients including WhatsApp and Uber alongside other lucrative first-time deals. There was a 32% entry of new customers during the fiscal period.
Bessemer Gaining Big from Twilio’s Bullish Run
Among the biggest and happiest beneficiaries of Twilio’s remarkable earnings is Venture Capital firm Bessemer. Bessemer invested in Twilio back in 2009 and remained steady during Twilio’s 2017 bear year where its shares fell 26%. The company’s shares plummeted upon an announcement by the CEO to investors that Uber was slowly pulling out from its service.
Although Bessemer has since disposed of half of its ownership in Twilio, the remaining half still holds substantial value especially in the wake of the company’s stock price surge. Bessemer has had an eye for a promising tech stock. The company invests in tech startups when their share is still realistic and not overvalued. The company is also known for investing in LinkedIn, VeriSign, Skype, and Yelp at their startup stages reaping handsomely from all the investments.
Bessemer winning again from Twilio’s SendGrid Acquisition
Bessemer will also profit from Twilio’s $2 billion acquisition deal of SendGrid. The former agreed to acquire SendGrid back in October for $2 billion worth of stock. Hawked-eyed Bessemer is among the initial outside investors for the e-mail marketing platform, SendGrid marking another win for the 107-year old Capita venture firm.
The discussion to acquire SendGrid has been ongoing for close to a year now with SendGrid rejecting a $750 million offer terming it as “inadequate.” The company also had an offer from one more company but as it turns out, Twilio carried the day. Speaking about the acquisition, Twilio Chief Executive Officer, Jeff Lawson said that, “We believe this is a once-in-a-lifetime opportunity to bring together the two leading developer-focused communications platforms to create the unquestioned platform of choice for all companies looking to transform their customer engagement.”
Upon the completion of the acquisition agreement (probably in 2019), Twilio will assume full ownership of SendGrid and as such upgrading SendGrid’s common stock to its shares. The companies are projecting gross revenue of $700 million after the takeover. If the prediction holds, the investment will pay off in 3 short years making it worthwhile after all.