US cloud provider 8x8 buys Singapore’s Wavecell for US$125m in cash, stock

WAVECELL, a privately held communications platform-as-a-service (CPaaS) provider based in Singapore, has been acquired by New York-listed 8x8 for around US$125 million in cash and stock, marking the US firm’s entry into the South-east Asian market.

8x8 is a cloud provider of voice, video, chat and contact centre solutions for more than one million users worldwide, while Wavecell offers SMS, chat apps, video interaction and voice solutions to help businesses enhance their customer experience.

A CPaaS is a cloud-based platform that allows companies to add real-time communications features – such as chat, voice and video – to their own customer-facing applications, without the need to build back-end infrastructure and interfaces.

Wavecell has more than 500 enterprise customers across the Asia-Pacific region, including Japanese fintech startup Paidy, Hong Kong-based logistics startup Lalamove, and Indonesian e-commerce unicorn Tokopedia.

Headquartered in Singapore, Wavecell also has offices in the Philippines, Indonesia, Thailand and Hong Kong.

The acquisition provides 8x8 with an established technology platform and a high-growth revenue business to pursue CPaaS globally, 8x8 said in a press statement on Thursday.

The US firm can now offer its customers enterprise-class application programme interfaces (APIs), bringing a CPaaS solution to its global communications platform.

8x8 expects the Wavecell business to quicken 8x8’s revenue growth rate and have a minimal impact on its full-year fiscal 2020 non-GAAP (generally accepted accounting principles) pre-tax loss.

The total consideration of US$125 million represents less than four times the anticipated calendar 2019 revenue for Wavecell.

It comprises about US$69 million in cash and US$56 million in 8x8 common stock, of which some US$12 million of common stock is subject to certain vesting restrictions over a three-year period.

This purchase price is subject to customary adjustments as well as holdback and escrow arrangements.

Vik Verma, chief executive of 8x8, said: “8x8 is now the only cloud provider that owns the full global-scale, cloud-native, technology stack offering voice, video, messaging and contact centre delivered as pre-packaged applications and enterprise-class APIs.”

8x8 plans to continue expanding in Asia and globally in order to meet evolving customer requirements, Mr Verma said.

Wavecell raised US$1.6 million in Series A funding in 2015, and US$8.15 million in Series B funding in 2017, according to its website.

Its investors include Qualgro, a South-east Asia-focused fund; MDI Ventures, a corporate venture capital initiative by Telkom Indonesia; and Wavemaker Partners, an early-stage venture capital firm with dual headquarters in Los Angeles and Singapore.