MessageBird acquires rival startup SparkPost

A global omnichannel communication company MessageBird is ready to acquired one of the biggest email service provider Sparkpost. The expected deal is said to be $600 million. This acquisition will help the Netherlands-based MessageBird expand its reach across the U.S., according to a press release. The deal is expected to close in the second quarter of this year. This comes as an extension to a $200 million Series C round MessageBird announced last October, were made public few days back.

The extension turns the Series C round into one of the largest startup investments in recent memory and among the biggest ever raised by a European tech firm.

The agreement will add 5 trillion secure business-to-consumer (B2C) email interactions to MessageBird’s platform a year, the release stated. MessageBird already offers channels like WhatsApp, Instagram, Google Business Messages, Messenger, WeChat, LiveChat, Apple Business Chat, Telegram and others.

The future of communications isn’t siloed — it’s omnichannel, said MessageBird CEO Robert Vis in the release. “Our acquisition of SparkPost will further strengthen our ability to serve customers through email.

The acquisition is another step for MessageBird to expand and allow consumers. This speaks directly with companies, just as they would with their family and friends.

Another factor behind the acquisition is that the deal will help MessageBird, which is currently mainly active in Europe and Asia, to grow its U.S. presence. The company disclosed to Reuters that the addition of SparkPost’s revenue will bring its global annual sales to $500 million.

SparkPost’s analytics features for optimizing email campaigns factored into the deal’s hefty price tag as well. “Its analytics products are stronger than its competitors, which allows for better inbox placement and delivery — and that’s exactly what our customers want to optimize,” Vis wrote in a blog post.

The deal represents a quick return for the investors who took part in SparkPost’s $180 million funding round this past January. As for the $800 million round MessageBird raised to finance the transaction, it reportedly values the startup at $3.4 billion. The more than dozen participants in the round included Tiger Global, BlackRock, Accel and Y Combinator.

Because the SparkPost acquisition is valued at $600 million, MessageBird should have about $200 million left over from the new funding. Given that a major motivation behind the deal is to unlock upselling opportunities, the startup might spend a portion of the remaining capital on growing its sales team. Additional deals are a possibility as well given that the purchase of SparkPost follows two smaller startup acquisitions MessageBird announced just a few weeks ago.

By joining forces with Messagebird, we will be able to bring broader, deeper value to all of our customers through any digital communications channel,” said SparkPost CEO Rich Harris in the release.

The deal adds companies like PayPal, Adobe, J.P. Morgan, The Walt Disney Co., Zillow, The New York Times, LinkedIn and others to MessageBird’s portfolio of customers, according to the release.

MessageBird also announced in the release that it expanded its Series C funding round to raise $1 billion in total. The round was backed by all existing investors, as well as new investors BlackRock, Eurazeo, Tiger Global and Owl Rock.

The round is the largest Series C in Europe to date, according to the release.

2020 was the year where this idea of omnichannel and retailing really got scale — where you basically create a three-dimensional experience between what has historically been a siloed online experience on your computer desktop and that of a physical store,” said Magats. “I think people are getting very comfortable with the idea of using a digital version of what they have used physically, with all of the different funding options and opportunities for choice.