MessageBird Raises $800 Million, Buys U.S. Startup SparkPost

(Bloomberg) -- MessageBird has agreed to buy U.S. email marketing firm SparkPost for $600 million, marking its fourth deal since October.

The Dutch software company raised $800 million from investors to fund the all-cash deal, which will intensify Messagebird’s focus on North America and its competition with U.S. rival Twilio Inc.

“We currently have maybe 20 folks in the U.S., but at the close of this transaction we’ll have about 300,” MessageBird Chief Executive Officer Robert Vis said in an interview. “So if there was ever a move we’re making into the U.S., it’s this one.”

SparkPost sells software that companies such as JPMorgan Chase & Co., PayPal Holdings Inc., LinkedIn and Adobe Inc. use to send marketing emails, and analytics tools to measure and improve how many people open and read them. The deal is expected to close in the second quarter.

“When we made the deal, we didn’t have the money to pay for it, so we actually raised eight hundred million dollars in 21 days,” he said. “It was an exclusive process so there were no bankers. We agreed on a price that made sense for all of us and then we had a time frame to go raise that money to show that we could actually pay for it.”

MessageBird, which completed a trio of acquisitions as recently as March, sells tools to companies that let them add a few lines of code to their app or website so customers can text, email, video conference or call in with questions. It also works directly with telecom operators worldwide to deliver SMS and instant message alerts, such as two-factor authentication codes or weather warnings.

SparkPost’s technology significantly extends MessageBird’s investment in email, and puts it in more direct competition with companies such as Mailgun and Sendgrid.

Participants financing the $800 million fundraise include Eurazeo, Tiger Global, Owl Rock Capital, and BlackRock Inc., according to a statement. Eurazeo’s Nathalie Kornhoff-Bruls will join MessageBird’s board.

MessageBird was recently valued at $3 billion by investors and is expected to be ready for an initial public offering as soon as this year. Acquiring SparkPost strengthens its domestic competition with Twilio, now valued at about $67.8 billion four years after it listed at a $1.23 billion market value.

Vis said it was still 10-year-old MessageBird’s intention to be ready for an IPO this year, but that it remained an option rather than a goal or necessity. He said the speed and volume of capital his firm was able to raise in just a few weeks showed access to funds was not a roadblock to growth.

The SparkPost deal will be a quick turnaround for some of that company’s backers. The Wall Street Journal reported in January the email marketing company had raised $180 million from investors including LLR Partners, NewSpring Capital and PNC Bank, more than half of which the paper said was in the form of equity.

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