Cloud communications company Twilio Inc is set to buy data analytics group Segment for $3.2 billion, Forbes disclosed, citing two sources with knowledge of the transaction.
This marks the biggest acquisition made by Twilio in as many years. The startup bought email platform SendGrid for $2 billion in 2018, in what had become the group's most important acquisition since then.
The deal, which was not finalized as of Friday afternoon, was projected to be at least based in part on Twilio stock, the sources who requested anonymity, said. The San Francisco-headquartered Segment has for months welcomed offers for a buyout, the report said.
A Twilio representative said the company does not comment on rumors or speculation. Segment also was not immediately available for comment.
Segment offers Cloud-based data platform that helps companies collect and manage customer information. Based on its report, Forbes stated Segment had been granted $175 million in a Series D funding round in April last year, which valued the company at $1.5 billion.
Segment had over 550 staff as of September 2019 and has teamed up with more than 20,000 businesses including FOX, Levi's and Intuit. Its investors include Accel, Alphabet's GV, Kleiner Perkins, and Y Combinator. Segment competes with Salesforce and Oracle in the customer data business.
Segment experienced some problems early on in the crisis. The company terminated 10 percent of its employees in May this year in anticipation of a difficult information technology spending scenario.
Twilio has benefited greatly during the ongoing global health crisis, with the company's stock price nearly tripling since the start of 2020. Its technology enables software engineers to create operating systems that can receive and make phone calls and send text messages.
Among Twilio's top clients are Amazon's Twitch, Uber, and Twitter. The California-based group has seen demand balloons as businesses in all industries upgrade their systems and online services to stay on course with the demands of the pandemic.
According to JP Morgan, Twilio - estimated to be worth $45.5 billion - is a "beneficiary of pandemic-catalyzed digital transformation acceleration," Reuters quoted the brokerage as saying.
Ittai Kidron, Oppenheimer analyst, said he sees Segment as a distinct "match for Twilio, similar to SendGrid, that can significantly round out and enhance Twilio's growth and market position," Smarter Analyst quoted Kidron as saying in an Oct. 10 note.
Twilio anticipated third-quarter revenues soaring above its previous outlook last week, as the move to telecommuting and learning bolstered demand for Cloud technology services.
