According to Analytical Research Cognizance, the global messaging platform market is expected to grow 8.2% annually to reach $3.4 billion by 2024 from $2.29 billion in 2019. South Korean player SendBird is following an API driven strategy to conquer this market.
SendBird was founded in 2013 by Brandon Y Jeon, Forest Lee, Harry Kim, and John S. Kim. It launched out of Y Combinator to build an enterprise focused app that could provide organizations with the ability to quickly add chat functions to their websites. It is working towards delivering customer satisfaction through its messaging platform that can connect both supply and demand throughout an organization.
SendBird’s platform helps deliver customized high-conversion messaging experiences that can connect users across multiple apps on any platform, mobile or web. Its Super Group chat allows chat interactions up to 300 and 2,000 users. Besides chat experiences, it provides push and custom notifications and helps organizations engage with its users through video, images, or audio in automatically generated thumbnails. It also provides analytic tools and dashboards that help track usage statistics. Its customer support solutions drive agent productivity by engaging customers at the right time through the right medium. Organizations can design auto routing and ticket transfer workflows and track support status in real-time to improve customer satisfaction.
Earlier this year, SendBird announced that it received a Service Organization Controls (SOC2) Type 2 certification for design and operating effectiveness of controls related to the security, availability, and confidentiality of its systems for processing user data. The SOC2 report proves that SendBird securely manages critical and sensitive communications for businesses. Besides SOC2, SendBird also has systems and procedures for GDPR, added HIPAA compliance, and ISO 27001 certification.
SendBird has its American headquarters in San Mateo and its APAC headquarters in Seoul, South Korea. It now employs more than 70 employees and has customers including the NBA, Glu Mobile, and Yahoo Sports.
SendBird offers its products on a monthly subscription basis. After offering a free trial subscription for three months, it charges its customers a monthly fee based on the nature of services selected. Its tiered pricing varies depending on the number of users using an application with SendBird messaging capability. Premium features such as chat moderation tools or automated translation are offered at an additional cost. SendBird is privately held and does not disclose its financials, but Owler estimates a revenue of $3 million annually. Other news reports reveal that revenues have grown threefold year-on-year, with nearly 30% coming from the US.
It has raised $70.7 million from investors including FundersClub, Y Combinator, Shasta Ventures, ICONIQ Capital, and August Capital. Its last round of funding was held in February this year, when it raised $52 million at an undisclosed valuation. It plans to use these funds to expand its messaging API tool. It is on a mission to develop into a company that digitizes all interactions between people and machines. SendBird appears over-funded for the revenue it is generating.
SendBird’s API Strategy
SendBird has attracted more than 50,000 developers for its services and provides more than 12,000 applications that account for over a billion messages exchanged every month. Its API approach has made it a leading scalable chat platform, capable of supporting over a million concurrent connections in each application that is used by some of the most subscribed mobile and web apps.
SendBird has several use cases to show how its messaging apps are helping companies drive monetization. For instance, for online real estate marketplaces like Zillow, chat capabilities help attract and retain customers and improve customer experience. Online real estate brokerages like Redfin can use these APIs to offer real-time counseling, personalizing listings, and messaging experience based upon the data logged in conversations.S
Analysts still believe that SendBird has a long way to go. As smartphone and the internet penetration continues to grow in emerging markets, SendBird’s use cases will continue to grow.
SendBird is not the only player in the space though. There are others like Twilio, Layer and MessageBird that deliver similar services. Twilio and MessageBird have built their services on the telephony infrastructure and cater more to calls and SMSs. Layer and SendBird have built with internet protocol (IP) messaging in mind, making it easier to integrate features such as photo sharing and group chats. Till we get more details on SendBird’s financials it may be difficult to chart out its future. Given the current revenue estimates it may just end up being a small acquisition target for the likes of Adobe or Salesforce looking to add to their communication capabilities, or for Twilio looking to quell some competition.