Twilio announced Monday that it will acquire Segment in an all-stock deal worth $3.2 billion. Segment is a player in the customer data platform (CDP) market, with software that aims to help businesses unify customer data to improve experiences.
Twilio plans to leverage Segment to add intelligence to its engagement cloud. By applying a data-driven approach typically used in marketing to analytics, product and customer service, Twilio said it will improve the end-to-end customer experience at every touchpoint.
The idea is to utilize Segment's platform as a means to pull data into Twilio's cloud communications services, allowing businesses to better understand their customers and engage more effectively.
"Data silos destroy great customer experiences," said Twilio CEO Jeff Lawson. "Segment lets developers and companies break down those silos and build a complete picture of their customer. Combined with Twilio's Customer Engagement Platform, we can create more personalized, timely and impactful engagement across customer service, marketing, analytics, product and sales."
More broadly, the acquisition lines up with Twilio's push into the contact center market and its efforts to unseat traditional legacy vendors like Cisco, Avaya, and Genesys. Twilio is betting that its call center platform Flex can bring more APIs to the call center and help enterprises customize more.
When the deal closes, Segment will become a business division within Twilio, with Segment cofounder and CEO Peter Reinhardt reporting to Lawson. The deal is expected to close in Twilio's fourth fiscal quarter. Twilio expects the deal to accelerate its growth with a combined total addressable market of $79 billion.
Twilio's last major acquisition was its $2 billion purchase of the API platform SendGrid. That deal was finalized in February 2019.