Twilio Launches $50 Million Twilio Ventures Fund; Street Says Buy

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Cloud communications platform Twilio Inc. (TWLO) recently announced the launch of its venture fund, Twilio Ventures. The fund has a corpus of $50 million and will invest primarily in developer-centric software companies and organizations engaged in customer engagement.

Following the news, shares of the company jumped 3.6% in Wednesday’s trading session. The stock, however, pared its gains slightly to close at $274.30 in the extended trading session.

Implications of the Fund

The fund will mainly invest in early-stage companies, however, attractive opportunities in late-stage companies cannot be ruled out.

The twin areas of investments for the fund include companies that fit within the Twilio ecosystem and companies involved in creating a better customer experience and engagement.

In addition to funding, the fund will also provide portfolio companies with ongoing mentorship, potential product and go-to-market support, and exposure to Twilio’s leadership, partners and customers, among other benefits.

Management Commentary

The Senior Vice-President of Corporate Development at Twilio, Bryan Vaniman, said, “We have deep roots in the developer ecosystem and have been partnering with startups for many years. Twilio Ventures will accelerate our ability to empower builders and the start-up community building the future of customer engagement by investing directly in their growth and success.”

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Price Target

Recently, RBC Capital analyst Rishi Jaluria reiterated a Buy rating on the stock with a price target of $450, which implies upside potential of 63.8% from current levels.

Consensus among analysts is a Strong Buy based on 16 Buys and 2 Holds. The average Twilio price target of $426.25 implies upside potential of 55.1% from current levels. Shares have declined 12.1% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Twilio’s performance this quarter.

According to the tool, the Twilio website recorded a 64.15% monthly rise in global visits in November, compared to the same period last year. Further, year-to-date, website traffic has increased 37.78%, compared to the previous year.

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