Softbank acquires 10.1% stake in Swedish cloud communications startup Sinch for €571M; find out why

Stockholm-based cloud computing services provider Sinch has announced that SoftBank is taking a 10.1% stake in the company for $690M (approx €571M) through its subsidiary, SB Management. 

The Swedish company said that it had issued 3,187,736 (approx 3.2M) new shares at a subscription price of 1.050 SEK (Swedish Krona) per share, with SoftBank the sole buyer. 

280% surge in stock 

The investment followed a near 280% stock price surge this year for Sinch. This makes the Japanese investment giant a significant shareholder in Sinch, which has been the best-performing company on the Stoxx Europe 600 index this 2020. This growth can be mostly attributed to the rapid surge in its userbase due to the pandemic. 

“We see clearly how our cloud-based platform helps businesses leverage mobile technology to reinvent their customer experience,” Oscar Werner, Sinch CEO, tells TechCrunch. “Whereas people throughout the world have embraced mobile messaging to interact with friends and family, most businesses have yet to seize this opportunity. We are establishing Sinch as a leader in a global growth market that is still very fragmented, and we’re excited that SoftBank is now helping us realise that vision.”

Acquisitions in 2020

According to the company, it would use the proceeds of the stock sale to fund future mergers and acquisitions. It’s worth mentioning that Sinch acquired SAP Digital Interconnect for £198M (approx €217M), Wavy for £98M (approx €107M), Chatlayer for £4M (approx €4.3M), and ACL mobile for £56M (approx €61.4M) this year.

In a statement, the company adds: “A fund managed by SB Management, a 100% owned direct subsidiary of SoftBank Group Corp, has, in accordance with its previous commitment, subscribed for 1,200,000 shares in the issue.” 

“In connection with the issue, and due to strong demand, certain larger shareholders, including several co-founders, have sold 5,200,000 existing shares in the Company to SB Management. In total, the SB Management will hold in total 6,400,000 shares, corresponding to approximately 10.1% of the shares and votes in the Company following the Share Issue and the Sell-down.”

Advisors

Carnegie and Handelsbanken Capital Markets have acted as Joint Bookrunners in connection with the Share Issue and the Sell-down. Gernandt & Danielsson has been legal advisor to the Company. Baker McKenzie has been legal advisor to the Joint Bookrunners.

Cloud-based omnichannel service

Founded in 2008, Sinch aims to bring businesses and people closer through its cloud communications platform that lets businesses reach every mobile phone on the planet, in seconds or less, through mobile messaging, voice, and video. Headquartered in Stockholm, Sinch has offices in over 30 cities worldwide, including Atlanta, London, Madrid, San Francisco, Singapore and Sydney.