Oct
12
2020
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Twilio’s $3.2B Segment acquisition is about helping developers build data-fueled apps

The pandemic has forced businesses to change the way they interact with customers. Whether it’s how they deliver goods and services, or how they communicate, there is one common denominator, and that’s that everything is being forced to be digitally driven much faster.

To some extent, that’s what drove Twilio to acquire Segment for $3.2 billion today. (We wrote about the deal over the weekend. Forbes broke the story last Friday night.) When you get down to it, the two companies fit together well, and expand the platform by giving Twilio customers access to valuable customer data. Chee Chew, Twilio’s chief product officer, says while it may feel like the company is pivoting in the direction of customer experience, they don’t necessarily see it that way.

“A lot of people have thought about us as a communications company, but we think of ourselves as a customer engagement company. We really think about how we help businesses communicate more effectively with their customers,” Chew told TechCrunch.

Laurie McCabe, co-founder and partner at SMB Group, sees the move related to the pandemic and the need companies have to serve customers in a more fully digital way. “More customers are realizing that delivering a great customer experience is key to survive through the pandemic, and thriving as the economy recovers — and are willing to spend to do this even in uncertain times,” McCabe said.

Certainly Chew recognized that Segment gives them something they were lacking by providing developers with direct access to customer data, and that could lead to some interesting applications.

“The data capabilities that Segment has are providing a full view of the customer. It really layers across everything we do. I think of it as a horizontal add across the channels and extending beyond. So I think it really helps us advance in a different sort of way […] towards getting the holistic view of the customer and enabling our customers to build intelligence services on top,” he said.

Brent Leary, founder and principal analyst at CRM Essentials, sees Segment helping to provide a powerful data-fueled developer experience. “This move allows Twilio to impact the data-insight-interaction-experience transformation process by removing friction from developers using their platform,” Leary explained. In other words, it gives developers that ability that Chew alluded to, to use data to build more varied applications using Twilio APIs.

Paul Greenberg, author of CRM at the Speed of Light, and founder and principal analyst at 56 Group, agrees, saying, “Segment gives Twilio the ability to use customer data in what is already a powerful unified communications platform and hub. And since it is, in effect, APIs for both, the flexibility [for developers] is enormous,” he said.

That may be so, but Holger Mueller, an analyst at Constellation Research, says the company has to be seeing that the pure communication parts of the platform like SMS are becoming increasingly commoditized, and this deal, along with the SendGrid acquisition in 2018, gives Twilio a place to expand its platform into a much more lucrative data space.

“Twilio needs more growth path and it looks like its strategy is moving up the stack, at least with the acquisition of Segment. Data movement and data residence compliance is a huge headache for enterprises when they build their next generation applications,” Mueller said.

As Chew said, early on the problems were related to building SMS messages into applications and that was the problem that Twilio was trying to solve because that’s what developers needed at the time, but as it moves forward, it wants to provide a more unified customer communications experience, and Segment should help advance that capability in a big way for them.

Oct
11
2020
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Twilio is buying customer data startup Segment for between $3B and $4B

Sources have told TechCrunch that Twilio intends to acquire customer data startup Segment for between $3 and $4 billion. Forbes broke the story on Friday night, reporting a price tag of $3.2 billion.

We have heard from a couple of industry sources that the deal is in the works and could be announced as early as Monday.

Twilio and Segment are both API companies. That means they create an easy way for developers to tap into a specific type of functionality without writing a lot of code. As I wrote in a 2017 article on Segment, it provides a set of APIs to pull together customer data from a variety of sources:

Segment has made a name for itself by providing a set of APIs that enable it to gather data about a customer from a variety of sources like your CRM tool, customer service application and website and pull that all together into a single view of the customer, something that is the goal of every company in the customer information business.

While Twilio’s main focus since it launched in 2008 has been on making it easy to embed communications functionality into any app, it signaled a switch in direction when it released the Flex customer service API in March 2018. Later that same year, it bought SendGrid, an email marketing API company for $2 billion.

Twilio’s market cap as of Friday was an impressive $45 billion. You could see how it can afford to flex its financial muscles to combine Twilio’s core API mission, especially Flex, with the ability to pull customer data with Segment and create customized email or ads with SendGrid.

This could enable Twilio to expand beyond pure core communications capabilities and it could come at the cost of around $5 billion for the two companies, a good deal for what could turn out to be a substantial business as more and more companies look for ways to understand and communicate with their customers in more relevant ways across multiple channels.

As Semil Shah from early stage VC firm Haystack wrote in the company blog yesterday, Segment saw a different way to gather customer data, and Twilio was wise to swoop in and buy it.

Segment’s belief was that a traditional CRM wasn’t robust enough for the enterprise to properly manage its pipe. Segment entered to provide customer data infrastructure to offer a more unified experience. Now under the Twilio umbrella, Segment can continue to build key integrations (like they have for Twilio data), which is being used globally inside Fortune 500 companies already.

Segment was founded in 2011 and raised over $283 million, according to Crunchbase data. Its most recent raise was $175 million in April on a $1.5 billion valuation.

Twilio stock closed at $306.24 per share on Friday up $2.39%.

Segment declined to comment on this story. We also sent a request for comment to Twilio, but hadn’t heard back by the time we published.  If that changes, we will update the story.

Sep
25
2019
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Segment’s new privacy portal helps companies comply with expanding regulations

With the EU’s sweeping GDPR privacy laws and the upcoming California Consumer Privacy ACT (CCPA), companies have to figure out how to deal with keeping private data private — or face massive fines. Segment announced a new Privacy Portal today that could help companies trying to remain in compliance.

Segment CEO and co-founder Peter Reinhardt says companies have built a false dichotomy between personalization and privacy, and he says that it doesn’t have to be that way. “We’ve noticed that a lot of companies feel this tension between privacy and growth. They basically see a paradox between being either privacy-respectful versus providing a very personalized experience,” he said.

The new Privacy Portal is designed to be a central place where customers can sort their data in an automated way and create an inventory of what data they have inside the company. “By introducing a single point of collection for all the data, it creates a choke point on the data collection to allow you to actually govern that, a single place to inspect, monitor, alert and have an inventory of all the data that you’re collecting, so that you can ensure that it’s compliant, and so that you can ensure that you’ve got consent, and all of those things,” he said.

The way this works is that as the data comes into the portal, it automatically gets put into a bucket based on the level of concern about it. “We are basically giving customers monitoring and a consolidated view over all of the different data points that are coming in. So we have matches that basically look for things that might be PII, and we automatically grade most of them with green, yellow or red in terms of the level of potential concern,” Reinhardt explained.

On top of that, companies can apply policies, based on the grades, say letting anything that’s green or yellow through, but preventing any red data (PII) from being shared with other applications.

In addition, to make sure that the product can connect to as many marketing tools as possible to get the most complete data picture, the company is releasing a new feature called Functions, which lets customers build their own custom data connectors. With thousands of marketing technology tools, it’s impossible for Segment to build connectors for all of them. Functions lets companies build custom connectors in a low-code way in instances where Segment doesn’t provide it out of the box.

The two tools are available to Segment customers starting today.

Aug
05
2019
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Segment CEO Peter Reinhardt is coming to TechCrunch Sessions: Enterprise to discuss customer experience management

There are few topics as hot right now in the enterprise as customer experience management, that ability to collect detailed data about your customers, then deliver customized experiences based on what you have learned about them. To help understand the challenges companies face building this kind of experience, we are bringing Segment CEO Peter Reinhardt to TechCrunch Sessions: Enterprise on September 5 in San Francisco (p.s. early-bird sales end this Friday, August 9).

At the root of customer experience management is data — tons and tons of data. It may come from the customer journey through a website or app, basic information you know about the customer or the customer’s transaction history. It’s hundreds of signals and collecting that data in order to build the experience where Reinhardt’s company comes in.

Segment wants to provide the infrastructure to collect and understand all of that data. Once you have that in place, you can build data models and then develop applications that make use of the data to drive a better experience.

Reinhardt, and a panel that includes Qualtrics’ Julie Larson-Green and Adobe’s Amit Ahuja, will discuss with TechCrunch editors the difficulties companies face collecting all of that data to build a picture of the customer, then using it to deliver more meaningful experiences for them. See the full agenda here.

Segment was born in the proverbial dorm room at MIT when Reinhardt and his co-founders were students there. They have raised more than $280 million since inception. Customers include Atlassian, Bonobos, Instacart, Levis and Intuit .

Early-bird tickets to see Peter and our lineup of enterprise influencers at TC Sessions: Enterprise are on sale for just $249 when you book here; but hurry, prices go up by $100 after this Friday!

Are you an early-stage startup in the enterprise-tech space? Book a demo table for $2,000 and get in front of TechCrunch editors and future customers/investors. Each demo table comes with four tickets to enjoy the show.

Jul
13
2017
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Marketing data startup Segment raises $64M

Segment co-founders Segment has raised $64 million in Series C funding, with the Y Combinator Continuity Fund and GV leading the round. The continuity fund is the $700 million fund led by former Twitter COO Ali Rowghani. It selectively writes checks for YC startups as they raise bigger rounds. As part of the deal, Rowghani will be joining Segment’s board of directors. In the funding announcement, he said… Read More

Dec
09
2016
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Segment adds Google BigQuery to expand its customer data platform

Segment BigQuery Segment helps businesses manage all their data from services like Google Analytics, Mixpanel and Salesforce — and send that data to a variety of destinations, whether it’s an attribution product or a data warehouse. The company announced yesterday that it’s expanding its offerings by integrating with BigQuery, Google’s data warehousing service. This might seem like… Read More

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