SendGrid launches email marketing service that undercuts MailChimp & Constant Contact

Discussion in 'ESP Discussion' started by roundabout, Jun 18, 2013.

  1. roundabout

    roundabout Well-Known Member

    Feb 17, 2011
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    SendGrid launches email marketing service that undercuts MailChimp & Constant Contact

    SendGrid is best known for helping big companies deliver millions of emails to their customers. But now the business is taking a dive into new waters with its own email marketing service, which will challenge leaders like MailChimp and Constant Contact.

    The move makes a lot of sense for SendGrid. The Boulder, Colo.- and Anaheim, Calif.-based company already handles the infrastructure that makes transactional email run seamlessly for “hundreds of thousands” of businesses such as Foursquare, Pinterest, Airbnb, Twilio, Spotify, and Pandora. (SendGrid would not say how many current customers it has but says it has served 130,000 over the life of the company.) So why not add an application that takes advantage of all that power?

    “People that are not developers can create emails and take advantage of the same infrastructure we’re known for,” SendGrid CEO Jim Franklin told VentureBeat. “And we cost half as much or more as MailChimp” when clients send more than 25,000 emails per month.

    The two big differentiators that set SendGrid apart from other services are unmatched email deliverability (when’s the last time you didn’t get a notification from Pinterest, Airbnb, or Foursquare?) and 2) volume-based pricing. Number one is a given, but number two is what might actually get marketers to give SendGrid a try.

    Pricing for SendGrid email marketing is simply based on volume rather than on a number of subscribers. Pricing for subscriber models starts cheap but then explodes if you have a lot of subscribers. SendGrid is staking out territory to become the go-to for high-volume email marketing communications. The service starts at $79 per month and goes up to the “five figures” based on how many emails you need to send each month.

    “We think this is the beginning of a big thing,” Franklin said. “There is a vast potential market for this.”

    While this is a big move for the company, Franklin insists that the company is still the nerdy, lovable businesses that developers have come to love. “This is a big initiative for us, but we are still fundamentally a developer-focused company,” Franklin said.

    SendGrid has raised about $27 million in funding to date. Investors include Bessemer Venture Partners, Foundry Group, Highway 12 Ventures, SoftTechVC, 500 Startups, and Bullet Time Ventures.


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