The Rise of Interactive Messaging and Sendbird's New Funding

In today’s digital landscape, messaging platforms are paramount, and a startup specializing in APIs for text and video interactivity has just secured significant funding to fuel its expansion. Sendbird, a well-known provider of chat, video, and other interactive tools utilized by companies like Reddit, Hinge, Paytm, and Delivery Hero – all accessible through a few lines of code – has completed a $100 million funding round.

Expanding Platform Functionality

The newly acquired capital will be strategically allocated to broaden the functionalities of Sendbird’s platform, adapting to the evolving demands of interactive communication. This investment confirms a company valuation of $1.05 billion for Sendbird.

Currently, approximately 150 million users are connected through Sendbird’s APIs for both text-based and video communication. This number has experienced substantial growth, particularly over the past year, coinciding with increased screen time as the primary means of global communication.

New Features and Services

Sendbird already offers essential services like content moderation and text search. CEO and founder John Kim stated that the adoption of features such as moderation has been remarkably high.

The company intends to integrate additional services, including payment processing and logistical support. Furthermore, Sendbird is exploring the implementation of group audio conversations, enabling clients to create their own platforms similar to Clubhouse.

“We are receiving numerous requests,” Kim explained. “Our approach will be to implement these features in a highly customized manner. The demand for voice chat has undeniably increased, influenced by the popularity of Clubhouse.”

Investment Details and Growth

The funding round, which was oversubscribed, is spearheaded by Steadfast Financial, with participation from SoftBank’s Vision Fund 2, alongside existing investors ICONIQ Capital, Tiger Global Management, and Meritech Capital.

This investment arrives approximately two years after Sendbird’s Series B funding of $102 million. The startup’s valuation has nearly doubled since 2019, estimated at around $550 million by PitchBook.

This growth is largely attributable to the current environment favoring virtual interaction, coupled with Sendbird’s own tripling of its customer base since 2019. The company maintains co-headquarters in Seoul, Korea, and San Mateo, California, and has now raised a total of approximately $221 million.

The Expanding Messaging Market

Since its founding in 2013, Sendbird has been targeting a substantial market. Messaging applications have evolved into a dominant digital force, surpassing the basic functionalities of traditional phones and gaining popularity through enhanced usability and features.

This trend has prompted numerous companies to integrate their own communication features, aiming to foster community and retain users within their platforms.

Competitive Landscape and Future Strategy

“There’s a competitive dynamic unfolding between messaging and payment applications,” noted Sid Suri, Sendbird’s marketing head. “Businesses are acutely aware of the need to prevent user attrition to these platforms. White-label solutions like ours empower them to remain competitive.”

Sendbird is among a growing number of companies recognizing this trend and offering communication functionality as a readily embeddable commodity via APIs. Key competitors include Twilio, MessageBird, PubNub, Sinch, Stream, and Firebase.

This competition underscores the importance of Sendbird’s fundraising efforts, providing the capital to attract new users and, crucially, to invest in expanding its feature set. This will address the needs of current users and uncover new opportunities to enhance user engagement within messaging channels.

“We are heavily focused on developing solutions for transactions and payments, as well as logistics,” Kim stated. “Our goal is to create a comprehensive end-to-end experience, as this directly impacts user engagement. New features will center around transactional capabilities and enhanced engagement strategies.”

Industry Perspective

Karan Mehandru, a partner at Steadfast, is joining the board of directors and believes significant opportunities remain, particularly in sectors like healthcare, which have yet to fully embrace robust communication channels.

“The channel that Sendbird provides is becoming an expected standard for all brands,” Mehandru commented. “While Sendbird may appear similar to its competitors, its ability to deliver a scalable and highly customized chat experience is a complex challenge. Large organizations recognize the critical importance of this but often lack the internal expertise, leading them back to Sendbird. Sendbird is a clear market leader, permeating numerous industries and company types. This is a company positioned perfectly for success.”