SendGrid, in partnership with companies like Pinterest, Foursquare, HootSuite, Spotify (News - Alert) and daily deals sites, has sent over 30 billion emails for marketers in the last three years. None of those emails have been spam. Subjects include friend requests and job openings, all of which users have asked to receive.
For its 40,000 web partners, SendGrid distributes emails. SendGrid also provides training to companies so that they can send emails are not reported as spam. “One person sending e-mail to another is easy. But an app sending out e-mail is hard. E-mail is a problem for developers,” explains Jim Franklin, CEO of SendGrid and a legend in the Boulder, Colorado, start-up community.
Currently, SendGrid is growing at about 10 percent and sending 3 billion emails monthly. Microsoft (News - Alert) Azure recently joined the company as a partner, making SendGrid the default email service for any app that uses Microsoft’s cloud. Users receive 25,000 free emails per month. SendGrid, which operates through RackSpace, receives 40,000 free emails of its own every month from that service.
In terms of capital, SendGrid has raised a total of $27 million. Investors include Foundry Group, SoftTechVC, Highway 12 Ventures and Bessemer Group Venture Partners. Many analysts expect the company to go public in 3 year, if it doesn’t accept an acquisition offer first. The company’s success goes back to what Franklin calls its 4 H’s: honest, hungry, humble and happy.
According to the Direct Marketing Association, email marketing generates about $40 for every $1 invested. In an Econsultancy survey, only organic SEO was named a better marketing tool by small businesses. Rather than being killed by social media and other trendier forms of marketing, email marketing is still generating strong returns for a variety of businesses. Even an old 2005 survey found that email marketing generated nine times the revenue and 18 times the profits of direct mailing.
Email marketing works for a variety of reasons. The emails can be targeted, are driven by data and can generate direct sales. Also, email supports sales through multiple channels and is a good tool for building loyalty and trust. Sixty-three percent of businesses increased their email marketing spend in 2011, while 29 percent of businesses kept their spend constant.
Email marketing is here to stay. And SendGrid plans to reap the benefits.
Edited by Jennifer Russell