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In the latest round of Q3 earnings in the CPaaS sector showed a steady march towards profitability and responsible growth.
Growth and the CPaaS Market
Challenges for Horizontal CPaaS Providers: Companies like Twilio, Sinch, and Bandwidth are navigating a tough economic landscape and a more discerning, cost-aware customer base. However, they are finding success with cross-selling strategies.
Klaviyo’s Robust Growth: Standing out in the SMB and mid-market segments, Klaviyo reported a remarkable 89% year-over-year growth in its higher-tier customer base. The company is also expanding its SMS services and eyeing the enterprise.
Market Valuations
The SaaS industry is witnessing a shift towards efficiency and budget-friendliness over bespoke designs and workflows. This trend is influencing customer purchasing decisions. In terms of valuations, Klaviyo and Twilio are leading the pack, recognized for their robust revenue growth and profitability.
Looking Ahead to 2024
With the challenges of 2022 behind us and a recovery-focused 2023, the outlook for 2024 is optimistic. The CPaaS industry is poised for growth, especially with events like the US presidential elections expected to spur business.
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