Contact: Thejeswi Venkatesh, Jason Verge
Hosted services provider Rackspace isn’t known for big M&A. Instead, it has focused on tuck-in acquisitions that build off of its hosting platform. In keeping with that strategy, the company on Wednesday announced the purchase of email-enabling API provider Mailgun. The deal should help make the Rackspace cloud more attractive to app developers.
Terms of the transaction were not disclosed, but Rackspace typically pays relatively low prices for small assets. Founded in 2010, Mailgun raised $1.1m in seed funding and reportedly had six employees. The Y Combinator startup was increasing revenue at 20% a month prior to the acquisition.
Mailgun provides APIs that allow users to send, receive and track emails easily from within their own applications. In a report detailing the deal, my colleague Jason Verge notes that the ability to add email to apps is a key feature in widespread demand. Rackspace looks to provide all of the tools customers need to build their technology stack on their cloud, and Mailgun adds to this toolbox.
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