Twilio is a company that works directly with developers, so having an in-house investment arm that helps these developers who are building companies on top of Twilio makes a lot of sense. Today the communications API company announced the launch of Twilio Ventures, a $50 million fund created to invest in companies using Twilio or those who are working on innovative adjacent ideas.
Bryan Vaniman, senior vice president of corporate development, who is in charge of the new investment arm, came over from Adobe in March with a mission to build a fund and start investing. He says that having a funding mechanism like this, which many companies do, is a natural extension of the mission of the company to empower developers with tools to build applications faster.
“It’s really about championing developers and startups that are building the next generation of customer engagement applications. We just think it’s a really natural extension of what we do being a developer-first company from the outset,” he said.
As the company has shifted to customer-oriented applications with the $3.2 billion acquisition of Segment last year, customer experience has become a big part of the focus for Twilio Ventures as they look for companies to fund.
“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,” he said.
The company will typically invest in Series A rounds, but will go later or earlier if the company is a good match, he said. Typically the checks are in the $1 million to $3 million range.
They’ve already invested in several companies that have a lot in common with Twilio, as you would expect. “If you look at the handful of investments we’ve made, Algolia is a great example of a company that shares a very similar developer personal ethos to us. They’ve developed a set of APIs that enable developers to build amazing kinds of search recommendation experiences,” he said.
Although they aren’t able to share exact investment amounts with these companies, he says that they are secondary strategic investors. The plan is to act as helpful partners and offer these companies access to internal resources and help with sales and marketing, but they will not have a board seat in most cases.
While it’s possible that they could consider acquiring some of the companies that they are investing in, that is not the primary goal of the fund. “That would be more of an ancillary benefit. It’s not the primary rationale for the program, but the benefit of investing and getting closer to companies and building relationships is that there’s potential for that to lead to a deeper relationship down the road, but that would not be the primary focus,” he said.
Other SaaS companies take a similar approach building an investment arm, including Salesforce, Zoom, Hubspot, Workday and Okta.