Following Facebook’s significant investment in customer service through the $1 billion acquisition of Kustomer, further substantial activity is occurring within the customer relationship management and engagement sector. Sinch, a Swedish firm specializing in cloud-based “omnichannel” voice, video, and messaging solutions for enterprise-level customer communication, has announced that SoftBank will be investing $690 million into the company.

Oscar Werner, Sinch’s CEO, explained to TechCrunch, “We distinctly recognize how our cloud-based platform empowers businesses to utilize mobile technology to redefine the customer experience.” He continued, “While mobile messaging has become commonplace for personal interactions globally, many businesses have not yet fully capitalized on this opportunity. We are positioning Sinch as a leader within a rapidly expanding, yet fragmented, global market, and we are pleased that SoftBank is supporting our vision.”

Specifically, Sinch has issued and sold 3,187,736 shares, valued at SEK 3.3 billion, and existing major shareholders have sold an additional 5,200,000 shares, with SoftBank as the exclusive purchaser.

This development highlights the increasing potential recognized by companies in the customer engagement and CRM space – including Sinch, Kustomer, Salesforce, and numerous others – to further strengthen their services. The shift towards remote work and the broader disruptions caused by COVID-19 have led to heightened demand and increased pressure on the digital channels people rely on to connect with organizations for support and information.

Modern customer relations and user engagement extend far beyond traditional 1-800 numbers and lengthy hold times. They now encompass social media, email, websites featuring live chats, chatbots, messaging applications, and, of course, phone calls.

Companies such as Sinch and Kustomer – which develop platforms to help businesses consolidate these diverse options into comprehensive “omnichannel” offerings – are benefiting from this demand and are now actively investing and exploring further growth strategies.

For Kustomer, this has meant integration with Facebook, which identified an opportunity to expand its CRM offerings to complement its existing business services. It’s worth noting Facebook is also developing a Nextdoor-like platform for local businesses and has significantly enhanced business tools within its messaging apps.

The next steps for Salesforce will be of particular interest. The acquisition of Slack provides a clear pathway into workplace communication, but Slack also serves as a popular tool for connecting with individuals outside of an organization. It will be important to observe whether Salesforce seeks to leverage this aspect of the business.

Sinch’s strategy centers on strategic acquisitions, exemplified by the $250 million purchase of SAP’s Digital Interconnect business unit, which serves 1,500 enterprise customers, primarily in the U.S., utilizing “omnichannel” communications. The company now intends to accelerate this approach, given the substantial portion of the market that has yet to modernize its communication infrastructure.

Sinch is publicly traded on the Swedish stock exchange, currently possessing a market capitalization of SEK 70 billion ($8.2 billion at present exchange rates). The company is profitable and generates positive cash flow, and therefore, “has no need to raise funding for our ongoing business,” according to Thomas Heath, Sinch’s chief strategy officer and head of investor relations, in a statement to TechCrunch.

For SoftBank, this investment represents another move towards taking significant stakes in rapidly expanding technology companies in Europe.

In October, the company invested $215 million in Kahoot, an online education platform catering to both students and businesses, centered around user-created “learning games” that can be shared. Like Sinch, Kahoot has a portion of its shares publicly traded on the Norwegian stock exchange and intends to allocate a significant portion of the funds towards acquisitions.

However, not all of SoftBank’s investments in established European businesses have been successful. A $1 billion investment in German payments company Wirecard ultimately proved problematic, as the company became embroiled in accounting scandals and subsequently entered insolvency earlier this year.

Sinch, being a profitable and stable business with predictable recurring revenue streams, appears to be a more secure investment at this time. Despite increased competition from Salesforce, Facebook, and others, Sinch’s CEO believes that the substantial untapped market potential offers ample opportunity for success.

Updated to clarify that Sinch considers its work “customer experience” more than CRM.