Twilio Raises Venture Funding, Looks to Expand Cloud-Based Phone Services

3/2/09Follow @gthuang

Seattle and San Francisco-based Twilio, a software startup focused on telephone applications, closed its first institutional round of funding today, according to co-founder Jeff Lawson. The investment was led by San Francisco-based venture firm Founders Fund (which includes founders of PayPal, Facebook, and Napster) and computer industry pioneer Mitchell Kapor, the creator of Lotus 1-2-3 and founder of the Electronic Frontier Foundation. The amount was not disclosed, but it’s enough for the firm to think about expanding its four-person team and its services, says Lawson, who is based in Seattle.

Twilio rolled out its product in late November—a cloud-based tool for Web developers to build phone applications for businesses, such as letting customers call in and get shipping information, record audio as an MP3 and send it as a phone message to friends, blog by phone, or just connect callers to specific cell phones or land lines.

There are plenty of existing tools for building voice applications, of course. But most require upfront payment for software or hardware, or take a while to get started. With its fast setup and pay-as-you-go service, Twilio has quickly amassed a customer base of more than 1,500 developers, who have built applications for businesses and large companies. Its top customers include Sony Music, Earth911, and Tumblr.com.

Lawson says he met his investors through the usual networking channels—events, colleagues, and other contacts. “They bring stellar backgrounds. They’re all coming from entrepreneurial backgrounds,” says Lawson, who notes that he has more connections with investors in Silicon Valley than Seattle. (He moved to the Northwest in 2004 to work on Web services for Amazon.) That is at least partly because there are many more investors in Silicon Valley. “We had great conversations with Seattle investors, but we just had more contacts there,” he says.

As for how the funds will be used, Lawson says, “We want to be able to expand our core offering of telephony operations in the cloud.” He added that the company has gotten some early traction in enterprise software, but wouldn’t say much specifically about what other markets he has his eye on. Twilio will also be growing its team, which is currently split between San Francisco (where co-founders John Wolthuis and Evan Cooke are) and Seattle, where Lawson remains.

“The Twilio team has merged the worlds of cloud computing, Web services, and telecom in unprecedented ways,” said Kapor, in a statement. “I’m excited to help Twilio grow, and explore the range of opportunities in this exciting intersection.”

Twilio plans to introduce a bunch of new features this year. “We listen to our customers a lot,” Lawson says. “There is a very active community on our site.” For example, a number of customers have been asking Twilio to provide services to international numbers—so far, it’s only been within the United States. “For us, it’s less of a technological issue than a pricing and business issue,” says Lawson. For U.S. phone numbers, the pricing is very simple: Twilio charges 3 cents a minute, or 5 cents a minute for toll-free numbers.

In the end, that’s probably the key to getting funded in the current climate. As Lawson emphasizes, “We are generating revenue.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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  • http://hintcafe.com Vivek

    I integrated Twilio into the early stage startup HintCafe and am writing to share my experience.

    At HintCafe, we built some interesting features like leaving a voice message for a user and calling another user without knowing their number. See http://hintcafe.com/faq or my example profile at http://hintcafe.com/user/vivek

    We built the following on HintCafe using Twilio

    a) Phone validation – users can add their phone number to the account. The phone number is validated using something similar to Twilio add-a-caller-id process. User is given a 4 digit validation code on hintcafe.com and user enters that code when hintcafe.com makes an outgoing call to the phone using Twilio make call api. The validation code is captured using Gather.

    b) Leave a voice message – The user calls hintcafe.com and then user is asked to record the message for the chosen user. This is done using Record verb. The message receiver is sent a flash player linked to mp3 of their recording on hintcafe.com inbox. The recording mp3 is fetched using recordingurl provided by Twilio.

    c) Call Forward – Users of hintcafe.com can talk to each other without sharing their phone number. The caller calls Hintcafe.com incoming number hosted on Twilio. HintCafe uses a dial to call the other user using callerID of HintCafe to make the dial. This way, both users can talk to each other without sharing their phone numbers.

    My last week developing the solution with Twilio has been a very positive experience. The Twilio team on help@twilio.com and here on forums is very prompt and concise in reply. The overall product is well designed with the REST APIs and is simple to user. And ofcourse, the pricing model is just fantastic which makes it capable for early stage startups like mine to build interesting features without considerable upfront cost.

  • http://www.hummingbytes.com Kris Subramanian

    I am the CTO of boston based hummingbytes Inc. – a mobile and voice apps. solutions company. Out of the many offerings, we have rolled out Customer Service products using Voice and SMS mechanism. Sending important updates, alerts (which can be scheduled) via Voice or SMS, SMS based customer service, Mobile coupons are the first set of products to hit the market this summer.

    Other enterprise integrations can be done using our APIs. Applications like IVR, Voice solutions, Mobile campaigns etc can be easily built. B2B integrations are very easy with the rich API set.

  • http://www.pyrameda.com Pyrameda

    Our company is very excited about Twilio’s approach to telephony and see big potential in the idea. An article which I recently read shows users how to create a click-to-call button on their website so that customers can speak to an agent simply by clicking and entering their call back phone number. You can see the full article here: http://thepursuitofalife.com/click-to-call-example-for-twilio/comment-page-1/#comment-1267

    In any event, this is probably one of the most exciting new technologies on the internet right now, and I am very much looking forward to seeing which direction Twilio’s management will take the company.

  • http://www.twilio.com Twilio

    Hi Gregory, Vivek, Kris and folks at Pyrameda.

    Today we publicly announced that we’re now accepting requests to join the Twilio International Outbound early developer access and we’d love to have all of you on board.

    http://blog.twilio.com/2009/08/get-early-developer-access-to-twilio-international-outbound.html

    Thanks for writing, reading, and supporting Twilio – hope to see you around soon!