Twilio Ditches Zipwhip Only 18 Months After Acquiring It for $850M

Zipwhip will permanently shut down on December 1, 2023

Twilio Ditches Zipwhip Only 18 Months After Acquiring It for $850M
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Published: November 3, 2022

Charlie Mitchell

Twilio has culled its Zipwhip solution, despite only acquiring the software in May 2021.

The news will surprise many. After all, the acquisition was an $850M mega deal.

It also empowered Twilio customers to access an out-of-the-box business texting platform, for which Twilio cannot offer an oven-ready alternative.

As a result, it cannot provide a simple migration path for its 30,000 Zipwhip customers after its services shut down.

Twilio suggests that businesses consider Podium, Voxie, or Text Request as possible replacements. These are its long-time partners.

Alternatively, there is somewhat of a crossover with Twilio Frontline – now generally available – which allows businesses to fit texting into their workflows using customizable APIs.

As such, perhaps not all was in vain, as the Zipwhip team’s expertise may have helped build out these SMS capabilities and maybe those of Flex – its CCaaS solution – too.

What Went Wrong for Twilio Zipwhip?

In Q2, Zipwhip contributed $34 million to Twilio’s revenue. During the earnings call just four months ago, the Twilio c-suite still seemed optimistic regarding its potential.

“We feel great about the Zipwhip product,” said Khozema Shipchandler, COO at Twilio. “I think we feel even better about the Zipwhip team. I think they’ve integrated really nicely into the business.”

“The business performance, as I said, is going really, really well. Obviously, there’s an A2P fee component there, too, which we break out for you all. But I really have nothing but very positive things to say about how Zipwhip has been performing.”

So, what has happened in the last four months for Twilio to drop Zipwhip altogether?

Economic uncertainty is the obvious answer, with many CX vendors battening down the hatches as a recession looms.

Streamlining its communications solutions portfolio is – therefore – perhaps a necessary act.

Indeed, Twilio’s stock has taken a 70 percent hit this year. Yet, as the markets adjust – after a period of hypergrowth – this is not unusual across the CX space.

Moreover, Twilio seems fixated on elevating other elements within its portfolio, including its CPaaS, customer data, and engagement platforms.

In these areas, it boasts a significant presence. For instance, reports suggest that Twilio leads the CPaaS market, which the FMI predicts will be worth almost $60 billion by 2032.

What Now for Zipwhip Customers?

There is no immediate rush for Twilio Zipwhip customers to move on, with its software services running until November 30, 2023.

Twilio also promises that it “will automatically convert renewing subscriptions to a month-to-month basis at the same monthly cost you currently pay.”

As such, the change will disrupt its clients’ current workflows and add no further costs.

In addition, customers can continue to request changes to their accounts, which will not impact their contracts or costs. These may include administrative alterations alongside user/line swaps, keyword changes, and integrations.

Finally, users can download and reinstall apps until the shutdown date.




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