Cloud-communications firm Twilio Inc (TWLO.N) said on Monday it plans to buy toll-free messaging provider Zipwhip for about $850 million in cash and stock.
Zipwhip, which provides a platform for businesses to use their landline or toll-free numbers to send text messages to customers, will become part of Twilio’s messaging business unit once the deal closes.
The Zipwhip deal, expected to close by the end of 2021, follows Twilio’s announcement in March that it would invest up to $750 million in telecommunications services company Syniverse Technologies LLC.
The deal is expected to modestly add to Twilio’s gross margin and revenue, according to the company.
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Morgan Stanley & Co LLC served as exclusive financial adviser and Cooley LLP acted as legal counsel to Zipwhip, while Fenwick & West LLP was Twilio’s legal counsel.
Zipwhip raised $51.5 million in a January 2019 Series D round led by Goldman Sachs Private Capital Investing group, along with existing investors including OpenView, M12, and Voyager Capital.
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The company was valued at $261.5 million after that financing, according to PitchBook, and total funding in Zipwhip was $92.5 million.
Lauer said at the time that he believed texting software could become as widely-used as email software — maybe even more so.
In an emailed newsletter about the acquisition on Monday, Voyager Capital shared some history of its dealings with one of its portfolio companies.
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Voyager was originally introduced to the Zipwhip opportunity and Lauer in 2009, when the CEO hosted a meeting in his home office and participants sat on bean bag chairs in his basement.
Voyager’s Bill McAleer and Randall Lucas “both saw that [Lauer] was on to something big,” the newsletter stated. The firm returned and led Zipwhip’s Series B round with a $3.0 million investment in September 2016 and McAleer joined the startup’s board.