Twilio is selling its IoT business unit to Kore, following a definitive signed agreement between the companies.
As payment, Twilio will receive ten million shares of Kore common stock, which equates to roughly 11.5 percent of Kore’s issued and outstanding shares.
IoT is not Twilio’s core offering, but its execs have regularly cited it for its untapped potential as a forward-looking investment. This deal surrenders control of its IoT unit but still allows Twilio to stay invested within the space.
Twilio’s Head of IoT, Taylor Wolfe, explains: “We are just scratching the surface of the opportunities IoT can unlock for customers.
As a global leader in IoT, Kore has the right expertise, vision, and technology to expand the robust offerings that Twilio’s world-class IoT team has built.
“Kore is the right home for Twilio’s IoT business, and we look forward to this acquisition increasing scalability and creating even more powerful business outcomes for our customers going forward.”
The deal will provide Kore with an experienced IoT team, a strong customer portfolio, and Twilio Super SIM, which has garnered a lot of attention.
Kore, which describes itself as the “world’s leading pure-play IoT provider”, believes the acquisition plays into its growth strategy and provides its customers with a unified and seamless IoT solution.
The acquisition will enable Kore to launch a connectivity suite, made up of Kore OmniSIM and Twilio Super SIM.
Kore will also be able to run a continuous operation of building, deploying, managing, and scaling operations using combined technologies and facilities.
Twilio’s IoT team’s digital experience, Kore’s 20 years of IoT experience, and 24/7 customer support will help to accelerate the time to market, according to Kore.
Completion of the acquisition remains subject to closing conditions, which include meeting certain ancillary agreements.
Romil Bahl, President and CEO at Kore, said: “IoT has immense potential to change the world.
“Whether it is ushering in the Fourth Industrial Revolution, supporting chronic disease management through remote patient monitoring, or optimizing agriculture and supporting sustainability, IoT has many powerful applications.
“Combining the digital prowess of Twilio’s IoT business and the comprehensive connectivity-solutions-analytics portfolio of Kore is a meaningful step toward proliferating IoT and making it more accessible and successful.”
“Kore is thrilled to augment our best-in-class IoT CaaS offering with Twilio’s IoT talent and customer portfolio.
“This acquisition represents exactly the kind of investment we have said we are willing to make to become an exciting top-line growth company, and specifically, we will benefit from the world-class digital experience and developer community Twilio has built for its IoT business.”
There has been speculation as to whether Twilio is being too hasty in selling its IoT business to a company that only entered the stock market around a year and a half ago and is yet to become consistently profitable. Kore appears to be perfectly suited from a technological perspective, however.
This is not the first product that Twilio has let go of. The company recently announced it is shutting down Zipwhip, only 18 months after acquiring it for $850 million. Zipwhip enabled customers access to an out-of-the-box business texting platform, and, without an alternative in place, there is currently no migration path for its 30,000 Zipwhip users.
Twilio’s recent financial struggles have culminated in two rounds of layoffs and have undoubtedly played a part in the company’s decision to hand over its IoT business. The second round of lay-offs in February this year, saw 1,500 employees, representing 17 percent of Twilio’s workforce, laid off.