Major CPaaS players are struggling financially, which will threaten their capacity to invest in new areas
The application-to-person (A2P) and communication platform-as-a-service (CPaaS) market has grown rapidly for several years, partly thanks to the COVID-19 pandemic. However, this growth slowed in 2023 due to a weak global economy and high interest rates. Indeed, Twilio and Sinch, the two largest public CPaaS businesses, had a combined revenue that grew at a CAGR of 56% between 2017 and 2022, but only 5% year-on-year in 2023.
Revenue growth for CPaaS companies will come from investment in new areas. However, key players such as Twilio have cut their research and development (R&D) spending to help to minimise losses, thereby making it more challenging to develop new revenue streams.
Analysys Mason’s Application-to-person vendor tracker providers further details on individual players’ revenue, metrics including the number of messages delivered and merger and acquisition activity in the A2P and CPaaS markets.
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