Vonage buys Nexmo for $230 million, eyes cloud communications dominance

Based in San Francisco, Nexmo is touted as the second largest CPaaS company in terms of revenue.

Internet communications company Vonage Holdings has agreed to buy Nexmo, a communications platform-as-a-service (CPaaS) company, for $230 million.

Based in San Francisco, Nexmo is touted as the second largest CPaaS company in terms of revenue. It's known for its range APIs for messaging, voice and chat that help users create communications services without a lot of development.

This is an area largely dominated by Twilio, but Nexmo claims to have more than 350 enterprise customers, including Uber, Alibaba, Snapchat and Daimler.

With the deal, Vonage is aiming to become a bigger player in the communications-enabled applications market, which research firm IDC expects will reach $8 billion by the year 2018.

Once combined, the companies will have a portfolio of cloud communications technology for enterprises that can handle both employee and customer-facing communications requirements. What's more, Nexmo's global network of carriers will help Vonage expand internationally.

"In 2014, we set out on a mission to become the clear leader in cloud communications for business," Alan Masarek, Vonage CEO, said in a prepared statement. "By combining Vonage's rapidly growing unified communications-as-a-service business with Nexmo, we are creating the future of cloud communications. These companies represent a set of strategic, technology and human resources assets that deliver the broadest services offering in our industry."

Nexmo co-founder and CEO Tony Jamous will join Vonage as president of Nexmo, a Vonage company, along with co-founder and CTO Eric Nadalin and Nexmo's 170 employees, Vonage said.

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