sinch acquires pathwire mailgun

Sinch Acquires Pathwire, Mailgun, in 1.9B Transaction

October 8, 2021

Sinch is Sweden’s leading communication service provider in the world. The company is renowned for its cloud communication tools that ensure seamless and fast communication between businesses and customers. It has recently made a big announcement of acquiring Pathwire, the developer of Mailgun – the software that supports quick and efficient delivery of emails as well as integration of your email with other apps. The main goal of Pathwire is to build an efficient mode of communication between users and businesses through email. 

A Brief on Pathwire and its Products

Mailgun is one of the most popular and fastest-growing products of Pathwire. Started as a small team in San Francisco, Mailgun has become the leading email service provider in the world with over 100,000 paying clients and a global workforce. The company will soon be merged with Sinch and the deal is expected to be closed by the end of this year. 

The workforce and founders of Pathwire were quite thrilled to announce this collaboration with one of the best cloud-communication developing companies in the world. The main goal of both companies is to ensure seamless and effective communication between businesses and customers. The acquisition of Pathwire also means that Sinch can offer better communication solutions to businesses.

The Acquisition Cost

The deal closed at $925 million (that will be paid in cash) and 51 million shares (in Sinch). Considering the current trading price of Sinch, this deal pays a whopping $1.9 billion to Pathwire. The deal is going to play a key role in making Sinch a tough competitor of Twilio. 

This shows the scope of email, which goes beyond the receipts of regular messages. The booking of hotels, train reservations, password reset messages, and other similar messages are delivered through email. Considering the current popularity and uses of email marketing, Sinch has estimated this industry to generate $16 billion annually. They have added email services, investments, and other products to the figure. Transactional marketing, the service covered by Pathwire, contributes to 60% of this revenue.

Pathwire was owned and operated by Thomas Bravo and the company itself was an acquirer of other tech giants and credible businesses in the same industry. In fact, it acquired one of the popular email service providers – Email on Acid – in June this year. So, it is only normal for people to wonder what made Thomas Bravo sell such a profitable and reputable company to Sinch. One thing that justifies the deal is the fact that 51 million shares of the company are given to Bravo, which makes him an investor in Sinch. So far, this deal is Sinch’s biggest and hopefully most profitable acquisition. Pathwire has made it possible for businesses to integrate email with mobile apps and other communication platforms. The company has reported more than 100,000 high-paying customers who are connected to millions of people using Mailgun and other email services. Some of the top businesses using Pathwire’s products for email marketing and other communication-based services are Microsoft, Kajabi, Lyft, and DHL.

The Popularity of Email Among Businesses

Oscar Werner, the CEO of Sinch, mentioned that for any form of digital communication, technical expertise is important. He further added that the main purpose of this collaboration is to provide customers with a seamless communication experience while offering businesses a reliable way to build connections with their audiences. 

This merge will help Sinch launch a set of products that make email, voice, and messaging more effective and easier for businesses. In addition to the estimated profits, this announcement of acquisition is expected to give Sinch a competitive edge in the US market where it has acquired other top communication service providers, such as Inteliquent for $1.14 billion. The company’s focus is totally on “embedded communication”. 

Building voice and email services from scratch is simply not a viable solution for any company, especially for those who need to integrate email into their apps and website. Since these companies have a totally different core service, investing their resources into building email services will be pointless. Not only does it cost a fortune, but the maintenance of the voice mails, messages, and other communication services can get hectic and time-consuming. APIs have brought a major transformation in the way communication services are built and used for marketing. Now, companies can buy the ready-made email APIs from the developers and integrate them with their services, websites, and apps effortlessly.

Email API – How is it Used and Why it’s so Popular?

API’s are not only used in the communication industry but are applied to other complex systems, such as financial services and payment gateways to ensure safe transactions. Pathwire has done a tremendous job at launching some of the best cloud communication tools and email services, one of the reasons why it’s a profitable buy for Sinch. Mailgun is the most comprehensive and extensively used email APIs for professional developers, while Mailjet is designed for regular users (the less tech-savvy) people. It allows them to use the drag-and-drop feature of the software to integrate email into their websites and mobile apps easily.

Sinch and Pathwire make a perfect fit, as both tech companies focus on providing businesses with an easy and reliable way of using email for their business operations. In addition to the goals, the companies have products in a similar category, making them a perfect solution for businesses looking for fast and easy mail integration options. The CEO of Pathwire, Will Conway, mentioned that he was very proud of how far the company has come and he is looking forward to this acquisition. There couldn’t be a better partner for Pathwire than Sinch, and given the deal Sinch is offering, it is obvious why Pathwire did not turn the offer down. With 51 million shares and $925 million in cash, Pathwire has secured a very good deal valued at approximately $1.9B in total. Add to this the fact that the founder will become an investor in Sinch, and it is clear why the deal took place.

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