Big Moment For CDPs, As Twilio Confirms $3.2B Deal For Segment

Did the CDP category just have its DoubleClick moment?

Twilio will acquire customer data platform Segment for a $3.2 billion in stock, the companies said Monday. Forbes first reported the deal on Friday.

Twilio powers automated mobile communications for clients such as Airbnb, Lyft, Blue Apron, Netflix, Hulu and Salesforce. Its Flex platform supports billions of in-app notifications, SMS alerts, automated voice calls and other messages key to mobile engagement and customer experience.

Segment will help Twilio extend its value proposition beyond messaging to central control of data. Segment powers “good data” for its clientele of B2B and B2C companies. The likes of Instacart, Peloton, IBM and Google use it to unify customer data from myriad touch points and maintain a consolidated record for each user.

Twilio CEO Jeff Lawson uses the term “customer engagement” to describe the $79 billion market the company is pursuing.

“We believe it’s just the start of the opportunity to bring data and APIs together to … build more relevant engagement across the board,” Lawson said on a call with analysts.

Segment CEO Peter Reinhardt says his company is set apart from other CDPs by its focus on IT and engineering stakeholders, as opposed to downstream business functions. Marketers, try not to be offended.

“Segment is part of a core data architecture for companies,” Reinhardt said. “While we do address marketing use cases, one of Segment’s core differentiators was focusing on the developer. The vast majority of our buyers are on the engineering and IT side.”

Downplaying the marketing use case also supports Twilio’s assertion that it has pioneered a new segment. Email and mobile marketing channels are well populated with vendors who have locked down customers and market share.

Segment employs roughly 600 people globally and has annual revenue of approximately $150 million, executives hinted on a Monday morning call with analysts.

The deal’s $3.2 billion price tag (albeit in stock) sets a new high-water mark for CDP valuations. Previous CDP acquisitions include Mastercard’s year-ago purchase of SessionM (terms undisclosed) and semi-conductor builder ARM Holdings’ 2018 purchase of Treasure Data for an estimated $600 million.