Good morning,
When you interact with Uber or DoorDash‘s app via text—you’re also interacting with Twilio, or at least its APIs behind the scenes, CFO Khozema Shipchandler told me during a recent chat.
Twilio, which is based in San Francisco, powers digital communications — SMS (text messages), voice calls, video, email — for its more than 235,000 customers; and it serves over 10 million developer accounts, according to the company. Founded in 2008, it trades under the ticker TWLO. Its annual revenue was $1.76 billion last year. Twilio announced on Monday that it has entered into an agreement to acquire Zipwhip, a business-texting platform service, for $850 million in an equal blend of stock and cash.
Twilio’s cofounder and CEO Jeff Lawson “pioneered” the development of APIs, (Application Programming Interfaces) which Shipchandler describes as easy enough for any developer to use, but able to power the world’s most demanding applications. “We’re huge believers in the API economy,” he says.
Shipchandler says APIs are valuable to both an “old-line industrial company that happens to have a lot of IT professionals, or a brand new digital first company, like a Shopify, for example.” Twilio started out creating APIs for businesses and consumers to digitally communicate, but soon took a nod from its clients who said they wanted better customer engagement.
An example? Retail banking.
Twilio powers customer engagement for retail banks including JPMorgan Chase, HSBC, and NatWest. Most of these relationships are usage based. “We only get paid if you’re seeing revenue events as your usage increases,” Shipchandler explains. “That’s only going to happen because you’re actually having interactions with the consumers on the other side of that transaction. And if you’re having interactions with consumers on the other side of that transaction, you’re driving revenue.”
He continues, “The good news for us is that there are trillions of these interactions that happen at a fraction of a penny all the time, and so we’re able to make pretty good money off of that, but it’s not at the expense of our customer.”
“I think for a company of our scale, and size and relative age, we’re very focused on how we can grow revenue in a way that provides maximum ROI to our customers,” he says. “But one thing that I pay a lot of attention to in my role is I never, ever want to feel like our growth is somehow coming at the expense of the experience that we’re providing customers.”
And that’s a collaborative effort. “When we talk in our management team meetings, I’m taking in a lot of signals from the customer team [and] from the product team to make sure that everything that we’re doing is in service of customers,” says Shipchandler.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
ToolsGroup, a supply chain planning software company, and the Council of Supply Chain Management Professionals released a new report that found 74% of professional surveyed said their digital supply chain planning transformations were influenced by the COVID-19 pandemic. The report is based on a global survey of supply chain professionals in industries including manufacturing, retail, and consumer packaged goods.
Going deeper
Many private businesses believe they are set to become more resilient in a post-pandemic environment, according Deloitte's most recent report on the global private company market segment. About 69% of respondents said the COVID-19 pandemic significantly accelerated their digital transformation. Deloitte found that there are seven key areas where the majority of companies are in the process of building their resilience: capital, growth, operations, society, strategy, technology, and workforce. The report is based on a survey of private company executives across 33 countries.
Leaderboard
Ursula Hurley was named acting CFO at JetBlue, effective June 12, 2021, in addition to her current duties as head of treasury and investor relations. Hurley began her career at the company 17 years ago. She succeeds Steve Priest, who is leaving JetBlue effective June 11 to pursue a new opportunity, according to the company's announcement.
Leo Redmond was named CFO at Aulos Bioscience, a biotechnology company. Most recently, Redmond was CFO at Allakos, an antibody therapeutics company.
Overheard
“The truth is, AT&T made a boneheaded decision and now they’re paying for it, but in corporate America, no one really pays for it, no one’s even allowed to say it, no one’s allowed to admit it.”
—CNBC’s Jim Cramer on AT&T's announcement it will spin-off WarnerMedia to create a new venture with Discovery, as discussed on Mad Money.
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