Sendgrid

SendGrid Raises $5 Million, Sends A Bajillion E-mails

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If you send 200 million e-mails a month you should meet SendGrid. The email delivery and management service has raised $5 million in its latest round of funding. Foundry leads the investor group, which includes angel investors Scott Petry (Postini founder) and Matt Mullenweg (WordPress) and several of SendGrid’s early backers, such as Highway 12 Ventures, David Cohen (TechStars), Jeff Clavier (SoftTech VC), Dave McClure (FF Angel). Foundry’s co-founder, Ryan McIntyre, will join the company’s board of directors.

“SendGrid elegantly solves what can be a dizzying array of problems for businesses sending important application-generated email,” McIntyre says. “The partners at Foundry Group have deep experience in the email ecosystem through investments such as Postini (acquired by Google) and Return Path, and we look forward to helping SendGride realize this vision.”

Since its Series A funding ($750k back in December), SendGrid (which was incubated by TechStars) has seen a nice boom in volume. Today, the company has 400 direct-paying customers, versus 100 in December. The service has also processed roughly 1.2 billion transactional emails.

Although the pay plans range from free to $800 a month the average pay user buys the “recommended” Silver package at $79.95 a month (there’s an additional fee per e-mail when you go over your monthly allotment).  In total, there are 3,000 users— a mix of direct-payers, payers through resellers and non-pay subscribers. While most users elect for the free service, SendGrid is proudly in the black– the company broke the profit barrier in January, according to SendGrid’s management.

In a nutshell, SendGrid offers businesses a way to manage transactional emails (emails generated by web applications), like its rival AuthSmtp. It can handle services like subscription, bounce management and complaint feedback. The point is to improve deliverability and provide an organized way to analyze and track e-mails— whether your business sends out 100,000 e-mails a month or hundreds of millions. As many companies with high e-mail volume will attest, bounces are a big deal— roughly 20% of transaction emails are rejected.

Several start-ups are utilizing SendGrid, like Swipely, Hootsuite and Mychurch, but the company is also courting some big fish. It’s biggest client, nabbed in January, has an average output volume of 200 million e-mails per month. To put this in perspective, Co-founder and CEO, Isaac Saldana says SendGrid as a whole is on track to deliver 500 million e-mails next month (approx. 400 million for March).

What’s next for SendGrid as they scale up? No sweeping changes to the service as of now. The company is focusing on small ad-ons (like its recent newsletter creator feature), tweaking its bounce management software to make it more customizable and increasing usability.

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