It was announced this week that Syniverse, an SMS aggregator, has acquired a minority stake in Vibes, an SMS marketing platform. This type of acquisition, where an SMS aggregator acquires all, or a part of an SMS marketing provider, has become considerably more popular recently, as SMS aggregators look to expand their services beyond just SMS aggregation.
Syniverse paid Vibes $45 million in the deal, with $40 million of that being in cash, and the remaining $5 million being paid to Vibes in common shares of the Syniverse Corporation, according to SEC filings.
Below are some of the more recent SMS aggregator acquisitions that have taken place.
- OpenMarket Acquired MX Telecom (March 2010)
- Motricity Acquired Adenyo (April 2011)
- CellTrust Acquired RevMobile (February 2012)
- Genesys Acquired Soundbite Communications (May 2013)
- Mgage acquired Outspoken (January 2015)
- Mblox Acquired 4INFO’s SMS Business (May 2105)
This also comes only weeks after CLX Communications announced they had acquired Mblox, a tier 1 SMS aggregator in the United States, and that’s in addition to Twilio revealing their plans to go public as early as June 2016. Big couple of months for the SMS marketing industry!
Why are we seeing so many SMS aggregators acquiring downstream SMS platforms like Vibes, Outspoken, 4INFO, etc? The reason is that over the last few years, especially with the introduction of companies like Twilio & Nexmo, the ability to make money off just providing messaging and SMS short codes has gotten extremely tough. This is because most SMS aggregators are selling the same product, with little to no differentiation. When this happens, usually there’s a pricing war, with a race to offer the lowest pricing, which eventually decreases everyone’s profit margins when selling those products. That’s why SMS aggregators are acquiring SMS marketing platforms, so that they can sell more than just a text message to their customers. By acquiring a platform, an SMS aggregator can sell software, services, strategy, etc.
What’s interesting to note is that while SMS aggregators continue to acquire SMS platform providers to expand their business offerings, there’s also been a huge amount of consolidation between SMS marketing platforms. Most recently Upland Software announced their purchase of HipCricket, which came after their acquisition of Mobile Commons for $12 million. Some of the other acquisition deals which have lead to a significantly more consolidate SMS marketing space are listed below.
- Tetherball Acquired by Waterfall (March 2015)
- Archer Mobile Acquired by Waterfall (November 2014)
- Signal Acquired by BrightTag (May 2014)
- EzTexting Acquired by CallFire (February 2013)
- Mozes Acquired by ePrize (January 2013)
Have a question about SMS marketing, or how recent acquisitions or consolidations could affect your SMS marketing plans, feel free to contact Tatango here to discuss.