US-based enterprise communication platform operator Twilio formally launched a $50m corporate venture capital (CVC) vehicle called Twilio Ventures yesterday.
Founded in 2008, Twilio has built a communication-oriented application programming interface (API) tool that enables developers to design and customise in-house voice, text, chat, video and email-based platforms.
The company had been backed by investors including e-commerce and cloud technology group Amazon and enterprise software provider Salesforce before it went public in 2016. The corporates also target investments in software-as-a-service (SaaS) companies through subsidiaries Alexa Fund and Salesforce Ventures respectively.
Video conferencing platform developer Zoom and customer relationship management (CRM) software provider Hubspot have formed their own strategic investment vehicles, Zoom Apps Fund and Hubspot Ventures, in recent months to partner SaaS entrepreneurs.
Human resources and finance management technology provider Workday has had a CVC scheme in place since 2018 dubbed Workday Ventures, while identity management software producer Okta formed Okta Ventures the year after.
Bryan Vaniman, Twilio’s senior vice-president of corporate development, told TechCrunch Twilio Ventures will focus on series A rounds with investments ranging between $1m and $3m, backing entrepreneurial projects in the CRM and SaaS spaces.
“Twilio operates at the customer layer of the internet to solve businesses’ most critical challenge – engaging with their customers,” Vaniman said. “We have deep roots in the developer ecosystem and have been partnering with startups for many years.
“Twilio Ventures will accelerate our ability to empower builders and the startup community building the future of customer engagement by investing directly in their growth and success.”
Brandon Leen, who had previously been senior director of corporate development at marketing and imaging software producer Adobe since 2015, has been appointed head of Twilio Ventures.
Twilio had already been active in the corporate venturing space, having backed companies such as go-to-market (GTM) software producer Calixa, advanced online search portal Algolia and Community, which runs a text messaging software platform.
Mux, which provides live and on-demand video-focused API software, is among the corporate’s recent investments, as are Hyro, which is working on conversational artificial intelligence technology, and Well Health, the creator of a patient communications SaaS tool.
Portfolio companies will be able to access Twilio’s resources, industry know-how and product GTM support through its team and network; however, the investments will not usually entail it taking a board seat.
Regarding their partnership, Algolia CEO Bernadette Nixon explained: “Twilio and Algolia share a vision of utilising API building blocks to empower developers to improve the customer experience and engagement.
“As a truly developer-first company pushing the boundaries of customer engagement, we are thrilled to have the support of Twilio as we embark on our next phase of growth.”
Twilio made a strategic acquisition in October 2020 when it purchased Segment, the customer data analytics provider that counted internet and technology group Alphabet’s GV unit among its investors, for $3.2bn.
As a result, the company has ramped up its customer engagement app development efforts, and this will be reflected in the CVC fund’s investment thesis.
Vaniman was quoted by TechCrunch as saying: “First and foremost, we see this as an opportunity to expand our reach and impacts within that ecosystem by supporting exciting companies that are building the next generation of capabilities for developers and customer engagement applications.”
The corporate’s impact investment subsidiary, Twilio.org, already runs the social enterprise-focused Twilio.org Impact Fund. It has most recently backed non-profit organisation Kapor Center for Social Impact’s Kapor Capital Fund III, which helps promote diversity, equity and inclusion through financial, healthcare and education technologies.
