The Making of a $2 Billion Deal: SendGrid & Twilio

As of October 15, 2018, Twilio has agreed to buy SendGrid for $2 billion, in an all-stock deal. The acquisition makes a lot of sense: Twilio makes phone and text messaging infrastructure, and SendGrid is the world’s largest email delivery platform. Unifying communications on a single platform that can support multiple channels makes sense.

Both Twilio and SendGrid have been impacted by Techstars over the years. In many ways, this deal is just the latest, headline-grabbing step in a nearly decade-long story about the power of the Techstars network in action.

In 2009, Techstars Ventures was one of the earliest investors in Twilio. And at the same time, SendGrid (Techstars Class 4, Boulder 2009) was going through the original location of the Techstars mentorship-driven accelerator program.

The Best Startup Founders

Back in 2009, companies struggled to get basic emails sent: “Order placed.” “Friend request received.” These crucial pieces of information were getting lost in spam filters, and it drove Isaac Saldana, the founder of SendGrid, nuts. “Isaac spent years lying awake at night, thinking about email,” says Mark Solon, Techstars Partner.

2009:

• At Techstars graduation, SendGrid had nearly 100 paying customers and had delivered over 100 million emails
• SendGrid $750,000 Seed round, led by Mark Solon and David Cohen, shortly after Techstars Demo Day
• Mark and David joined the SendGrid board of directors

That deep need to solve a problem, plus the expertise and team to get it done — these are what Techstars looks for in a startup, and one way Techstars finds the best startup founders, the ones who are going to succeed.

The Power of the Techstars Network

Isaac had passion, skills, and a great team, but he knew that “you also need great mentors around to help ask the questions you don’t think to ask.” That’s what brought him to Techstars.

Techstars mentors are the best in their fields, and the best at helping startups grow.

Techstars, in turn, recognized the huge potential in SendGrid.

“SendGrid has grown so fast because the founders got the product-market fit exactly right almost from the founding of the company,” says Jim Franklin. Jim is an experienced entrepreneur and a long-time mentor for Techstars, and Techstars cofounder Brad Feld introduced Jim to the SendGrid team.

Today, SendGrid’s current CEO Sameer Dholakia — also a Techstars mentor — is excited to keep growing SendGrid, in partnership with Twilio. “Our two companies have always shared a common goal — to create powerful communications experiences for businesses,” Sameer says. “We share common values, as well, including the Techstars value of Giving First.” With this much in common, Sameer is confident of the success of this new phase for SendGrid.

2010: SendGrid $5 million Series A led by Foundry Group

Over the years, Twilio has played an important role in the Techstars network as well. Techstars offers “perks” to startups that have gone through our mentorship-driven accelerator programs, such as free or discounted services from other companies in the network. Twilio has provided perks to the network for years, a relationship where everybody wins: startups get access to crucial communications tools, and Twilio builds a customer base among growing companies.

Twilio CEO Jeff Lawson did his part to #givefirst also, mentoring many Techstars startups during Twilio’s — and Techstars — early days.

It’s always about the people. That’s what mentorship really means: people helping people.

That’s also how great companies get built — and that’s the power of the Techstars network.

From Inspiration To IPO

2017:

• Pre-IPO: SendGrid has raised over $80 million venture funding in a total of 8 rounds
• November 15: IPO: SendGrid goes public to raise an additional $131 million and quickly becomes a billion dollar “unicorn.”
• November 27: Cyber Monday, over 2.1 billion emails sent through SendGrid

SendGrid made history in November 2017 when they became the first company from any accelerator program to IPO. When they did, David Cohen, Techstars CEO, and Mark Solon, Techstars Partner — who both served as SendGrid board members from 2009 until just prior to the IPO — were there to help the company ring the bell at the New York Stock Exchange, proudly trumpeting the Techstars vow to support Techstars companies “from inspiration to IPO.”

$2 Billion To Solve Strategic Communications Challenges

SendGrid and Twilio are both still part of the Techstars network — and now Twilio is acquiring SendGrid for $2 billion.

“The two companies share the same vision, the same model, and the same values,” says Twilio CEO Jeff Lawson. “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.”

MarketWatch reports that SendGrid stock jumped by 17% after the announcement.

2018:

• Over 74,000 SendGrid customers like Spotify, Uber, and Airbnb send over 45 billion emails every month
• October 15, 2018: Twilio agrees to buy SendGrid for $2 billion

Want to join the Techstars network? Apply to one of our mentorship-driven accelerator programs.