Why Twilio Acquired Segment | RudderStack

neub9
By neub9
3 Min Read

The team at Segment has achieved a remarkable milestone with their acquisition by Twilio. Since 2011, when they were accepted into Y Combinator, to reaching unicorn status with a $1.5 billion USD valuation in 2019, and finally being acquired during the pandemic in 2020, Segment’s success showcases their exceptional vision and execution.

When Segment first released their analytics.js, it faced criticism for its similarity to a tag manager. However, the support of the developer community, especially on HackerNews, helped propel Segment as a real-time data federation tool. This success is a testament to the power of the developer community, particularly in the early days.

Although Twilio recently acquired Segment, it is interesting to note that Twilio was not a top destination for Segment, indicating little overlap between their respective customer bases. This acquisition indicates a strategic move by Twilio rather than a means to drive retention or reach their existing customer base.

Twilio’s acquisition of Segment is strategic for a few reasons. Firstly, it allows Twilio to move away from the low-margin API business and expand into the application stack. Additionally, it positions Twilio to enter the marketing use case by creating an end-to-end marketing cloud. This acquisition also provides Twilio with valuable insights into the market and the potential to acquire missing components of the marketing stack.

In light of the acquisition, Twilio CEO Jeff Lawson has demonstrated his ambition to build an iconic business akin to Salesforce. With Twilio’s stock price climbing rapidly in the last 6 months, this acquisition is poised to add significant market capitalization to Twilio.

While this acquisition leaves a gap in the market for data teams seeking flexibility and control over their customer data platform, RudderStack offers an open-source alternative to Segment. As the leading warehouse-native customer data platform, RudderStack provides data teams with the control, flexibility, and transparency they need to run their CDP on their own warehouse or data lake. Try out RudderStack for free and start sending data through their event stream, ELT, and reverse-ETL pipelines. Install one of their 15+ SDKs in your website or app to get started in less than 5 minutes. Join RudderStack today to take control of your customer data platform.

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