How Twilio Might Raise their 50M Series D | Hacker News Reader

How Twilio Might Raise their 50M Series D

thepbxblog.com

26 pointsjosh260016 comments

Is Twilio profitable?

Probably not. There's a lot of competition (Plivo, Tropo, etc) in this space now, so they have to keep their rates low.

Can you please give me a brief reason as to why not? I have no clue as to what might be expensive for them and so forth. I know what they do and how their service works, though. As a developer, I mean.

This is complete speculation by me, so take this with a grain of salt. Their product has essentially been commoditized - there are so many companies offering telephony APIs that they probably cannot charge prices that are high enough to offset the costs of paying ~100 developer salaries.

Companies with similar products:

- Tropo

- TelAPI

- CallFire

- SendFlow

- Holio

- Many more (see: http://www.quora.com/Who-are-Twilios-competitors)

If you look at the pricing of all these offerings, you will immediately notice that they all are pretty much the same. What this tells me is that there is enough competition in this space that the margins are likely very low.

Edit: fixed a typo (CalFire -> CallFire)

That's a good point. They seem to be making the same thing. Didn't really see much difference in the offerings. Though Twilio seems to have a better brand. How much have they raised over time?

33.5M so far.

Twilio has the best documentation of any Communications API vendor, but their issue when working with large operators is their inability to work inside the corporate firewall. They're on AWS with a lot of servers and it is not a part of their strategy to build a new infrastructure inside of someone else's firewall. Voxeo does build inside the firewall, but they're a lot harder to understand.

There's a lot of confusion about who does what in our industry, even Twilio is what I'd describe as an access-innovator.

In Telecom the change that's happening right now is the exposure of underlying communications services. Companies like Twilio are taking services like calls, SMS and Video connections and creating APIs to consume these services. Right now, there's no easy way to do these things programmatically.

Companies like 2600hz, where I work, take a different approach where we're actually working on the underlying infrastructure (not so much on the API). In this respect a company like Voxeo is much more competitive to Twilio.

Callfire is a call-application service and not really competitive to a Twilio or a Plivo.

So yeah, lots of stuff going on, very complicated. Most folks are working on the access layers or applications and not the underlying infrastructure.

85.5 million in funding if this round is to be closed. Chump change to what they are working on cracking open. Like you said, the work they are doing is more on the industry than anything else. Who knows where they might pivot to once telecoms open up a bit more.

Interesting point: what is Twilio's addressable market in your opinion?

I don't know the market that well, aside from doing some analysis on some of the telco securities (for my own use). Though they seem to be building themselves to be a next-gen telco.

That's what I thought at first, but they're not. Next-gen telco has a lot more hardcore infrastructure; Twilio is building next-gen DEVELOPER infrastructure, which is a huge addressable market but < than all of Telco.

So how big is their market? Certainly >$1B but <$10B in the next 3 years. After 3 years though it could start to eclipse the greater telco ecosystem.

It's tough; I'd say there's some potential for them to build next-gen Telco, but I think they're more concerned with Next-Gen APIs than core infrastructure. My $.02.

Yes, exactly. A next gen telco will simply use the infrastructure that is already there. No need to re-invent the wheel. It is paid off and profitable. All the next-gen telco needs to do is simply open it through APIs. That would allow them to circumvent a lot of the issues with doing a completely new telco from the gound up.

Yeah, I don't know if I agree with that. There's a whole web of glass and conduit that has to be maintained. Someone still has to link all of those nodes together.

Twilio can consume the application business, but I'd be surprised to see them consume the core infrastructure.

That's what the infrastructure owner will do. It might be the old telcos, it might be the government, or even a new type of utility company. The infrastructure will be maintained. Though the new type of telco can operate with the old ones. They will simply buy them out.

I don't know if you've noticed, but AT&T has a $200B market cap... Twilio isn't going to be buying them out anytime soon...

I disagree with the concept of the government taking over the Telco grid; that's not going to happen in the US.

I meant AT&T or other buying twilio. In terms ogf government, the auto bailouts set a precedent for others to follow.

They're not public so it's hard to say, but I would hazard a guess that Twilio has not turned a profit yet

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