MessageBird, a cloud communications platform that counts publicly listed Twilio as a competitor, has raised a hefty $60 million in Series A funding. The round is being led by Accel in the U.S., with Atomico, the VC firm founded by Skype’s Niklas Zennström, leading in Europe.
Notably, I’m told this is the largest Series A for a graduate of Silicon Valley accelerator Y Combinator, and in quintessential European enterprise startup fashion, Amsterdam-founded MessageBird is already profitable. Aside from YC investment, the startup has been bootstrapped till now, too, and is on track to hit a $100 million run rate this year. Keeping up? I do hope so — all of which begs the question of why the company has raised funding now and why such a large round.
In a call, MessageBird founder and CEO Robert Vis told me that, even though the startup has “been profitable from day one,” the level of in-bound enquiries it had started to get not only validated demand but was also at a level that the then 40-person team could no longer service. To grow and scale appropriately, a cash injection was needed, although he stressed that more than money he wanted to choose VCs that could genuinely add value. This included telecoms expertise, with Vis saying that Accel and Atomico in particular met that criteria.
“It’s one of those situations where we wanted to raise money to grow our teams but I didn’t want to just take money from everywhere,” he says. “VC money in that sense is sort of like a commodity, there is enough of it out there if you build something that people are interested in. But I think it’s really important to find partners that are a really good fit and that are going to fit with your culture”.
Another interesting aspect of MessageBird is that it has historically targeted larger enterprise customers and, says Vis, built more direct relationships and connections to carriers, so that it can compete on price, reliability and security.
On the surface, MessageBird has a product similar to other cloud communications platforms — ie it offers various voice, video and text capabilities all wrapped up in a API — but Vis says that because the company has its own telecoms infrastructure and direct integrations with 220 carriers globally, it is much closer to the end point, having to make far less hops so to speak, which can otherwise introduce delays or messages never arriving at all. This, he says, is critical for the enterprise, such as, for example, a bank’s app sending you an SMS alert for you to confirm that a purchase isn’t fraudulent.
Direct carrier integrations also means that, unlike other cloud communications platforms, MessageBird doesn’t need to go through additional third-parties, which reduces cost. I understand that one competing cloud communications platform used to be a customer of MessageBird itself in order to offer wider coverage, though Vis declined to confirm if that was indeed Twilio.
All of which brings us to MessageBird’s 15,000 international customers, which along with the likes of DoorDash, SAP, Huawei, ING, Amber Alert, and Heineken, includes Uber. If you have been following the cloud communications space closely, you’ll know that Twilio also counts Uber as a customer but in May issued guidance that revenue would fall because the ride booking app was planning to diversify its cloud comms provision, including moving away from Twilio as its principal communications infrastructure provider. It now looks as if MessageBird has picked up some, if not all, of that slack.
Vis said he couldn’t comment on Uber specifically, but says there are a number of reasons why a very large communications app, which Uber is, would look to use a range of cloud communications platforms once it reached a certain scale, not least to bring down cost and introduce competition as part of any sourcing and procurement strategy. “I think we get chosen because we are a really secure, fast and cost effective solution for them,” he says.