sinch, a swedish customer engagement giant, raises $1.1b, softbank and temasek participating

Sinch Secures $1.1 Billion Investment for Expansion

Sinch, a Swedish company competing with Twilio in the communications space, has announced a significant funding round. The company provides APIs enabling businesses to integrate communication features – particularly focused on customer engagement – into their services.

New Funding Details

A direct share issue has yielded $1.1 billion for Sinch. Key investors in this round include Temasek and SoftBank, bolstering the company’s resources for continued growth.

The share issue involved 7,232,077 shares priced at SEK 1,300 each, raising approximately SEK 9.4 billion. This equates to roughly $1.1 billion based on current exchange rates.

Investor Breakdown

The investment was drawn from a mix of Swedish and international institutional investors. Temasek committed to SEK 2,085 million, while SB Management, a SoftBank subsidiary, invested SEK 0.7 million.

This translates to a $252 million investment from Temasek and $110 million from SoftBank. It’s worth noting that SoftBank previously invested $690 million in Sinch last December, when the company’s valuation stood at $8.2 billion.

Strategic Acquisitions

Prior to this funding, Sinch acquired Inteliquent in the U.S. for $1.14 billion in January. This acquisition was a strategic move to strengthen its position in the competitive landscape, bringing it closer to Twilio’s core market.

Future Plans & M&A Activity

Sinch intends to utilize the new capital to reinforce its financial standing and facilitate further mergers and acquisitions (M&A). The company has a proven track record of successful acquisitions.

According to a company statement, Sinch is “well placed to drive continued consolidation of the messaging and communications platform as a service (CPaaS) market.” The increased financial flexibility will enhance its ability to act as a competitive buyer.

Company Performance & Reach

Sinch operates profitably across more than 40 markets. Its communications APIs, supporting channels like SMS, WhatsApp, and voice/video, processed 40 billion mobile messages in the last quarter alone.

• The Inteliquent acquisition has provided a strong foothold in the U.S. market.
• The company aims to become a leading global cloud communications platform.

CEO Oscar Werner emphasized the importance of leadership in the U.S. voice market to achieve this goal.

IaaS and CPaaS Balance

While Sinch, like Twilio, initially focused on an API-driven communications model, the Inteliquent acquisition introduced a substantial Infrastructure-as-a-Service (IaaS) component.

This IaaS offering caters to telecommunications companies, providing services like off-net call termination and toll-free numbers.

Currently, the CPaaS and IaaS divisions each contribute roughly half of Sinch’s total revenue. However, the CPaaS business is experiencing growth at twice the rate of IaaS, indicating the company’s strategic focus for the future.