Twilio's Dutch rival MessageBird plans an IPO in 'gold rush'

[LONDON] Disgruntled customers don't sit on hold anymore. They text and Zoom and Whatsapp and Web chat and email, and they don't want to wait 72 hours for a response. For MessageBird, the Dutch software company that helps clients make sense of the deluge, that's meant a surge in sales and plans for an initial public offering (IPO).

Robert Vis, MessageBird's 36-year-old founder and chief executive officer, said there's been a fundamental shift in the enterprise communications industry, away from the calls and emails that made up customer inquiries in the past to a proliferation of apps. It's been driven by on-demand digital businesses, such as Uber Technologies and Airbnb, and the growth of cloud-based tools such as those from Slack. MessageBird is on track to grow by 50 per cent to about 300 million euros (S$471.4 million) this year, he said.

"We're working with bankers and my CFO (chief financial officer) has the directive to IPO in 12 months," Mr Vis said in an interview. "As a company 10 years in, we should be able to IPO." He added that there's no specific timing for the potential share offering, and the plans would remain under review.

Few companies have been brave enough to try their luck on the stock market in an IPO since coronavirus lockdowns threatened economies around the world. European companies have raised about US$5.8 billion in 2020 so far, down 35 per cent from the same time last year, according to data compiled by Bloomberg. But some businesses have come out stronger.

MessageBird's listing would be following larger US competitor Twilio, which is now valued at about US$30 billion four years after it listed with a US$1.23 billion market value. Twilio's share price has roughly doubled during the Covid-19 crisis due to a surge in demand for its products by companies depending on online services like WhatsApp and Zoom to resolve consumer complaints as stores sit vacant.

"GOLD RUSH"

In an August report, Gartner analysts described the communications-platform-as-a-service market as "experiencing a gold rush". MessageBird and Twilio let companies add a few lines of code to their app or website that allows customers to text, email or call-in their questions to support teams. When they work best, the tools are all but invisible to end users.

MessageBird in addition makes sure that, no matter what platform they use, a business's customer isn't having to repeat security phrases or explain their inquiry to multiple support agents. It also works directly with mobile-phone carriers to help businesses equip themselves for sending two-factor authentication codes and one-time passwords to their users, among other functions.

"It's not as simple as just being on WhatsApp. That's the easy part," Mr Vis said. "The hard part is how do you completely integrate it into your workflows and then shift over your very, very expensive legacy channels onto these messaging platforms?"

On the agent side, integrations with products from Salesforce.com and Slack mean it's possible for a business to acquire a new customer, answer questions and make sales without leaving MessageBird's software. Moves by the likes of Facebook, Alphabet's Google, Apple and also Shopify to blend and expand their messaging and payment products only increases the market opportunity for companies like MessageBird, Mr Vis said.

BOOTSTRAPPED FOUNDER

Mr Vis founded the company in 2011 after he sold his micropayments business, Zaypay. Amsterdam-based MessageBird now has about 350 employees in 21 cities, and additional offices in Singapore, San Francisco, Sydney and Bogota.

The company isn't profitable, and expects losses to be in the "low single-digit millions" this year, but Mr Vis said he's been an "extremely careful, bootstrapped founder" and MessageBird's consistent year-on-year growth was a more important measure of the company's health.

"We grew to 100 million euros with no outside funding and no outside investor whatsoever," he said. Since then, MessageBird's raised about US$100 million from venture capital investors such as Atomico, Accel and Y-Combinator.

Coming from the Netherlands gives MessageBird unique advantages against its bigger rivals, Mr Vis says. "Here, you have to stay global from day one because we're a small country. So our view has really been on the world, not just the Netherlands or Europe."

The company uses artificial intelligence to translate messages in different languages and lets people pay in their local currency, he said.

"Everybody wants to live in a messaging-first world," Mr Vis said. "I think that's the key. Messaging is just, by all stats, a more efficient way to communicate with a business for marketing, for sales, for support."

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