Sinch’s recent acquisition will help it become more competitive in the business messaging segment. Here are the top-line bullets you need to know.
Sinch, a cloud-based communications platform provider, has acquired MessageMedia, a provider of mobile messaging services, for $1.3B in a combination of cash and shares. The deal is expected to close in Q2’21.
WHO ARE THE PARTIES TO THE DEAL?
- MessageMedia – Melbourne-based MessageMedia provides SMS services for small- and medium-sized businesses (SMBs). The company has offices in the US, Australia, New Zealand, and Europe and serves over 65,000 customers worldwide, such as General Electric, Cisco Systems, and Kelly Services. The company has over 350 employees and is expected to generate revenue of $151M and a profit of $94M by June 2021.
- Sinch – Sweden-based Sinch is a communications platform-as-a-service (CPaaS) provider that offers application programming interfaces (APIs) and software development kits (SDKs) for SMS generation, voice, rich communication services (RCS), and more. Its customers include FirstBank, Yespark, Budbee, Nissan, and Unitel. Sinch reported having 1,778 employees at the end of 2020.
WHY DOES THE MARKET MATTER?
The acquisition strengthens Sinch’s position in the CPaaS space where:
- The global CPaaS market is projected to grow at a CAGR of 34.3% and reach a value of $26B by 2026, according to Mordor Intelligence.
- The segment will keep evolving as major companies like Microsoft, Cisco, and AT&T enter and provide additional competition.
- The Covid-19 pandemic accelerated the shift to CPaaS to boost customer service and operating efficiencies in industries like retail, food delivery services, telehealth, remote learning, and utility services.
- It is expected that the ratio of companies using CPaaS APIs will rise from 20% in 2020 to about 90% by 2023.