Uber tech supplier Twilio set to test public markets

Jeff Lawson, CEO of Twilio.
Photographer | CNBC
Jeff Lawson, CEO of Twilio.

While Uber CEO Travis Kalanick has made it clear his company won't go public anytime soon, investors may instead be able to get a small piece of the ride-sharing company's technology through a developer called Twilio.

Twilio, whose cloud-based software allows users to have one-on-one conversations without divulging their personal phone numbers, announced plans on Thursday to raise up to $100 million in an IPO.

The company's technology is particularly handy for Uber, which needs to facilitate communications between huge numbers of drivers and riders using Twilio's "masking capabilities to ensure a high level of privacy and safety," the prospectus said.

Twilio's filing lands during a dead period for IPOs. Square debuted in November, followed by software developer Atlassian in December, but no venture-backed companies have tested the market in 2016. Cloud storage and computing vendor Nutanix is on file to go public and is holding off due to market volatility.

Twilio, based in San Francisco, was founded in 2008 at the dawn of the smartphone era. The emergence of mobile devices has dramatically helped its customer base grow, with companies like Nordstrom, OpenTable and TaskRabbit using the software to power notifications and chats.

Uber counts on Twilio for a number of services.

"As we expand our portfolio of products and services, from Uber for Business to UberEats and UberRush, we trust Twilio to keep us on the cutting edge of innovative communication," Kalanick said in a statement.

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Twilio was on the CNBC Disruptor 50 list each of the previous three years, ranking 41st in 2015.

A Twilio offering may be the closest public market investors can get to Uber for quite a while. Sporting a $62.5 billion valuation, Uber is choosing to load up on billions of dollars of private market capital rather than deal with the constant scrutiny that comes with being listed.

Twilio has raised more than $233 million in venture funding, with investments from Amazon.com, Fidelity Investments and Salesforce Ventures. Bessemer Venture Partners and Union Square Ventures are the company's biggest stakeholders.

Revenue jumped 78 percent in the first quarter to $59.3 million, while the company's net loss narrowed to $6.4 million from $8.8 million.

WhatsApp, the messaging platform owned by Facebook, uses Twilio in a big way to verify new and existing users. The company accounted for 15 percent of revenue in the first quarter, a level of concentration that poses enough risk for Twilio to disclose in its prospectus.

"WhatsApp has no obligation to provide any notice to us if they elect to stop using our products entirely and, as such, the contribution from WhatsApp could decline to zero in any future period without advance notice," Twilio said.

Twilio will be listed on the New York Stock Exchange under the ticker symbol TWLO. Underwriters of the offering include Goldman Sachs and JPMorgan.