Started off two credit cards, Australian tech company sells for $1.7b
Melbourne technology company MessageMedia has been snapped up by Swedish software giant Sinch in a $US1.3 billion ($1.7 billion) deal.
MessageMedia enables businesses to send SMS messages through web-based software and handles more than 5 billion messages a year for over 60,000 customers.
The deal is one of Australia’s biggest ever tech acquisitions and follows hot on the heels of a $2 billion deal for Melbourne cloud training platform A Cloud Guru last week.
The startup came close to the edge in 2002 with the credit cards maxed out and no money left but MessageMedia co-founder Grant Rule and his co-founders managed to secure investors.
Grant Rule, Justin Lau and Regina Hill started the business in 2000 and Mr Rule said it had been a “remarkable journey”.
“Our success has been born out of a love for technology and problem-solving with our customers and it’s those values which will see our growth continue with Sinch,” he said. “I’m very proud of what we’ve achieved to date, but with Sinch, I believe it’s just the start.”
MessageMedia started when text messages were in their infancy and the founders used their credit cards to bankroll the business.
“We hired some uni students to write the code and struggled along, not really knowing how to build a business or to sell or market, and we didn’t have any real money, either,” Mr Rule said in an earlier interview with The Age and The Sydney Morning Herald. “The whole thing was funded off a couple of credit cards.”
The startup came close to the edge in 2002 with the credit cards maxed out and no money left but Mr Rule and his co-founders managed to secure investors.
“I went to the ATM to get some money, and there wasn’t a cent in the account,” Mr Rule said. “That was it. The end. If the investors had not come good we would have been finished.”
From there MessageMedia has gone from strength to strength, becoming the Australian market leader and expanding internationally with nine successful acquisitions, most recently of SimpleTexting in the United States.
Mr Rule has equity in the business while private equity firm Mercury Capital acquired a minority stake in 2018.
In the year ending June 30, 2021 MessageMedia is expected to record revenue of $US151 million and a profit of $US94 million.
It employs more than 350 people and is headquartered in Melbourne.
Sinch chief executive Oscar Werner said the tech giant would look to further MessageMedia’s international expansion and wanted MessageMedia to be the preferred mobile messaging vendor for small and medium-sized businesses around the world.
“Addressing small and medium-sized businesses opens up a new avenue to growth and dramatically expands our addressable market,” he said. “With MessageMedia as a part of Sinch, we have the best team in the industry to capitalise on that opportunity.”
The deal is subject to regulatory approvals and if it closes will see MessageMedia continue to operate as a separate business unit for Sinch.
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