Insight Bite: Mailgun Deal Highlights Investor Appetite for Enterprise Software

Enterprise software-focused private equity firm Thoma Bravo have acquired a majority stake of Mailgun, the Y Combinator graduate that provides email infrastructure products to companies such as Stripe, Slack, Lyft, Iterable and GitHub.

Former owners Turn/River Capital, and the Mailgun management team, will retain a minority stake, and use the new investment to help accelerate development and expand the platform to compete against other enterprise-developer focused email competitors like SendGrid, and Amazon’s Simple Email Service.

“Mailgun’s partnership with Thoma Bravo gives us the capital and operational expertise needed to continue growing our company, expanding our product suite, and building upon a truly comprehensive developer-focused offering” said Will Conway, CEO of Mailgun in a press release. “Thoma Bravo has a proven track record of helping software companies achieve exceptional results, and we look forward to leveraging their investment experience.”

At nearly every stage of Mailgun’s short history, the company has benefitted from the support and guidance of investors. Soon after graduating as part of the Y Combinator Winter 2011 cohort, Mailgun was acquired by the American cloud computing company Rackspace, which held on to the company for five years before spinning it out to form an independent corporation. Then, on reaching independence from Rackspace, Mailgun secured $50 million in funding from private equity firm Turn/River to keep building its developer-focused email infrastructure.

This steady stream of investment has helped support rapid, yet sustainable and profitable growth for Mailgun, and under the guidance of experienced enterprise software investors Thoma Bravo, this could be expected to continue.

As the enterprise software industry grows and expands into different operational areas, private equity buyers with various different backgrounds are taking more of an interest. With often outsized returns and high valuation multiples, enterprise software can offer these investors a unique opportunity to capitalize on the potential for profitable growth.

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