Why 8×8 Is Acquiring Wavecell For $125 Million

By Noah Long ● July 22, 2019
  • Leading cloud provider of voice, video, chat and contact center solutions 8×8 announced it is acquiring Communications Platform-as-a-Service provider Wavecell for $125 million

8×8 — a leading cloud provider of voice, video, chat and contact center solutions for more than one million users worldwide — announced that it has acquired Singapore-based privately-held global Communications Platform-as-a-Service (CPaaS) provider Wavecell Pte. Ltd. for about $125 million in cash and stock. This acquisition will provide 8×8 with an established technology platform and high-growth revenue business for pursuing CPaaS globally and it represents a natural expansion of 8×8’s cloud business from Unified Communications-as-a-Service (UCaaS), Contact Center-as-a-Service (CCaaS), and Video into the CPaaS market.

Wavecell is planning to further accelerate 8×8’s growth, expand its international presence, and deepen the company’s technology capabilities in cloud communications. And the acquisition expands 8×8’s presence into the rapidly growing Southeast Asian market, including Singapore, Indonesia, Philippines, Thailand, and Hong Kong with a talented employee base and more than 500 enterprise customers such as Paidy, Tokopedia, and Lalamove. Plus Wavecell also brings an R&D center in Asia — which allows 8×8 to further accelerate growth in product innovation and delivery.

“The market opportunity in CPaaS is growing rapidly, and this acquisition enables us to quickly provide these services to our customers around the world,” said 8×8 CEO Vikram Verma in a statement. “8×8 is now the only cloud provider that owns the full, global-scale, cloud-native technology stack offering voice, video, messaging, and contact centre delivered both as pre-packaged applications and as enterprise-class APIs. We’re excited to welcome the Wavecell employees to the 8×8 family. We now have a significant market presence in Asia and expect to continue to expand in the region and globally in order to meet evolving customer requirements.”

By acquiring Wavecell, 8×8 is increasing its addressable market to include CPaaS as it gains access to a large-scale and well-recognized platform for providing SMS, messaging, voice, and video APIs globally to both enterprises and developers.

And it will enhance the only fully-owned end-to-end cloud communications platform. For example, 8×8 will expand its API offerings, making it the only cloud provider able to natively offer both pre-packaged contact center, communications, and video solutions as well as open APIs to embed communications into an organization’s core business processes.

Plus the company will expand its global presence and coverage. And 8×8 will increase its marketing, sales, and support presence across the Asia Pacific region, including local offices in five Asian countries. And it also expands its global voice and messaging network with relationships and contracts across more than 190 carriers globally, including extensive coverage across Asia.

“With the acquisition of Wavecell, we can now offer customers enterprise-class APIs, bringing a CPaaS solution to our global communications platform,” added Dejan Deklich — the Chief Product Officer of 8×8. “Customer demand for CPaaS is accelerating and now organizations can easily add real-time communication capabilities that include SMS, chat apps, voice and video to improve the experience for their end-customers. The integration of all the API’s and data into one CPaaS platform gives 8×8 customers unprecedented ability to engage with end-users in true omnichannel fashion and understand the full customer journey.”

Wavecell is also known for having built a robust enterprise developer community over the past several years — which has leveraged its API platform and software development kits to enable their organizations’ digital transformation initiatives thus bringing real-time communications to customer engagement and creating differentiated customer experiences. And 8×8 can now enable application providers, enterprise developers, and customers to easily and quickly access and natively integrate their enterprise applications with 8×8’s voice, video and messaging services.

“We are delighted to become part of 8×8, one of the world’s leading cloud communications platforms. Now is the right time to leverage the global expansion of UCaaS, CCaaS and CPaaS services to better serve our customers’ growing demand for communication services and to continually drive greater innovation,” explained — Olivier Gerhardt, the CEO and co-founder of Wavecell.

Wavecell provides global coverage for multi-channel communications spanning 190 countries through relationships with 192 network operators worldwide and business partners like WhatsApp. And its carrier-grade infrastructure enables customers to share more than 2 billion messages per year across these channels.

And this global network enables Wavecell customers like Lalamove (Asia’s leading local delivery platform) to use SMS to immediately notify customers of their ordering and delivery requests. And the acquisition extends 8×8’s global carrier relationships and network support to hundreds of additional carriers, enabling 8×8 to further optimize its global service delivery for enterprise customers anywhere they operate around the world.

The $125 million deal value represents a multiple of less than 4x anticipated Wavecell calendar 2019 revenue. And it is comprised of approximately $69 million in cash and approximately $56 million in 8×8 common stock, of which approximately $12 million of common stock is subject to certain vesting restrictions over a three-year period for a net U.S. GAAP purchase price of approximately $113 million.