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Pictured above: The SendGrid team
The reports of email’s death have been greatly exaggerated. But you don’t have to tell SendGrid that.
Boulder-based email service provider SendGrid has just raised a $20 million Series C round of capital from Bain Capital Ventures, and former investors Bessemer Venture Partners and Foundry Group. The company’s new funding comes amidst rapid growth and shortly after hiring new CEO Sameer Dholakia in early October.
Founded in 2009 within the Techstars accelerator program, SendGrid provides automated email and email marketing cloud-based services. Companies use SendGrid’s cloud hosted services and analytics in place of their own email infrastructure, allowing them to focus more on their core products. As such, the company now delivers more than 175 billion emails per year and a host of prominent clients rely on SendGrid’s platform to email their customers, including Uber, FourSquare, Pinterest, Airbnb, Spotify and Pandora.
SendGrid pioneered cloud-hosted email services when it started five years ago.
“The core [of SendGrid’s business was] originally built around automated emails. That’s really where SendGrid cut its teeth,” said CEO Sameer Dholakia. “Interestingly today as customers started using us for transactional emails, they saw they could easily pipe their email marketing through us as well.”
More recently, SendGrid has benefited from the huge explosion of mobile apps.
“The vast majority of those apps require some way for users to communicate with them and email remains the primary communication channel,” said Dholakia. “It’s easy to plug SendGrid in as a backend service.”
Using its new capital SendGrid will build out its technology platform by “applying big data techniques to the massive amount of emails we send on behalf of our customers and providing our customers a more holistic view of the emails they send,” said Dholakia.
The rest of the money will be used to start an outside sales team and increase marketing activity.
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Pictured above: SendGrid email statistics as of late August 2014
Citing several studies SendGrid believes the market for email services is rapidly expanding. A study by Forrester projects email marketing services spending to grow to $2.8 billion by 2018, and another study by the Radicati Group projects email traffic will grow to 192 billion emails sent per day by 2016.
To date, SendGrid has raised $46 million in total. With that kind of capital, and private equity investors like Bain Capital, some are asking whether SendGrid is eying an IPO.
“We’re not really focused on an IPO at this point,” said Dholakia.
Before going public he said SendGrid has a lot of heads down work to do. However, “given the strength of our business it is certainly something we could look to do in the future. That is certainly the trajectory Sendrid is on.”
SendGrid has received investment from a long list of investors including Bain Capital Ventures, Bessemer Venture Partners, Foundry Group, Highway 12 Ventures, Bullet Time Ventures, SoftTech VC, 500 Startups and individual investors like Scott Petry and Matt Mullenweg.
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