Twilio has reached an agreement to buy the customer data platform Segment for $3.2 billion. The all-stock transaction is expected to close in the fourth quarter of 2020.

In a statement, Twilio said the deal would accelerate its efforts to build the leading global customer engagement platform and offers a combined total addressable market of $79 billion.

“Data silos destroy great customer experiences,” Twilio chief executive Jeff Lawson said in a statement. “Segment lets developers and companies break down those silos and build a complete picture of their customer.”

Lawson said the combination of Segment with its own platform would allow it to improve customer engagement across customer service, marketing, analytics, product, and sales.

The acquisition is being made entirely in Twilio Class A stock. Under the terms of the deal, after closing Segment will become a division of Twilio.

Segment raised $175 million in a Series D round in April 2019 that was led by existing investors Accel & GV. New investors at the time included Meritech Capital, Thrive Capital, Y Combinator Continuity, and e.ventures. That round reportedly valued Segment at $1.5 billion.

The acquisition is the largest for Twilio since it acquired the API-centric email platform SendGrid for about $2 billion in October 2018. Twilio, which went public in June 2016 and has a market capitalization of more than $45 billion, counts the American Red Cross, Deliveroo, and bank ING among its customers.

“Together, Twilio and Segment have an incredible opportunity to build the customer engagement platform of the future,” Segment CEO Peter Reinhardt said in a statement. “By joining forces and applying our customer data platform to Twilio’s engagement cloud, we’ll be able to make the entire customer experience seamless from end-to-end.”

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