MessageBird's Possible Twilio Takeover Could Aid CPaaS Channel Partners

Communications-platform-as-a-service (CPaaS) startup MesageBird reportedly is looking to acquire rival and publicly traded Twilio. Activist investors at Twilio, having successfully pushed out the company's co-founder and former CEO, Jeff Lawson, appear to have set the stage for a potential takeover.

The Dutch cloud service provider caused Twilio stock to climb 3% following the news of a possible acquisition. Recently rebranding itself as "Bird," the firm has undergone five funding rounds, raising over $1 billion in capital, Crunchbase notes. Bird's valuation, however, is nearly $4 billion. 

Yahoo Finance reports Twilio's market cap at $12.73 billion, making Bird's market cap one-third of Twilio's, meaning any potential acquisition could seem to be a long shot. But many experts say it's not out of the question, considering Bird's ability to attract deep-pocketed investors.

At the very least, Bird wants to make its rival, Twilio, sweat a bit more, also having slashed its prices by more than 90%.

Telecommunications expert Giovanni Tarone said an acquisition is "definitely possible," noting that Bird has the backing of Y Combinator. It's one of the largest investment firms in the world, based in Silicon Valley, and once led by OpenAI CEO Sam Altman. 

Bird's Twilio Buyout Could Benefit CPaaS Channel 

Tarone said he believes this based on a LinkedIn post by Bird's founder and current CEO, Robert Vis, who wrote that he's looking to acquire companies in the fintech space. Fintech is an area in which Tarone said CPaaS partners could benefit.

Forecasters at McKinsey & Company note that as of 2023, "publicly traded fintechs represented a market capitalization of $550 billion, a two-time increase versus 2019." Tarone said a potential Twilio takeover was an opportunity, adding, "Your margin is my opportunity," while calling any potential movement on the acquisition front "the Amazon approach."

"Why would I bet against a guy who has already raised over $1 billion?" Tarone posed, further arguing that "Silicon Valley has already pumped money into Bird, so if it wants to do so for it to buy Twilio, it will do that."

Members of the CPaaS channel may benefit from a merger that would give Twilio partners access to a less developer-dependent set of tools, while solution and implementation partners at Bird could gain a bigger customer base looking for platform simplicity. 

According to Partnerbase.com, Bird has 57 CPaaS partners − 44 are technology partners and 13 are channel partners − with Salesforce being its most sizable ally. Twilio has some 488 partners, meaning potentially massive CPaaS partner gains for Bird when it comes to revenue.

Possibly Bold Move by a Seemingly 'Small' Startup

The move would not be Bird's introduction to the U.S. market, as it purchased SparkPost in 2011 for $600 million and Hull in 2013 for an undisclosed amount.

Infosys' Venkat Kandhari

"Twilio's brand is everything," unified communications engineer at Infosys, Venkat Kandhari, told Channel Futures, adding the move would be a good one for CPaaS partners familiar with the brand.

He also said it would be wise not to switch up the branding because Gartner named Twilio a leader in its annual CPaaS Magic Quadrant.

"Twilio is to CPaaS what Nvidia is to the chip space," he told us. 

There are some potential challenges

"How would they integrate their stacks seamlessly?" Kandhari pondered.

Yet, the most beneficial aspect of a merger for Bird and its CPaaS partners is that it would gain access to Twilio's FedRAMP certification, meaning capturing a sizable federal market in the United States, Kandhari told us.

As companies such as IntelePeer rebrand themselves from CPaaS to automation firms, analyst David Smith at InFlow Analysis said "automation is sexy," and increased customer demand has forced CPaaS providers to modernize.

"It's a matter of semantics since they mostly do the same thing ..." Smith said. Plus, "automation is much sexier than customer experience (CX)."