Thoma Bravo Acquires San Antonio’s Mailgun as Scaleworks Takes Exit

San Antonio—Thoma Bravo has acquired a majority stake in Mailgun Technologies, a spinout of Rackspace that offers software to help developers manage automated e-mail systems for their employers.

Mailgun separated from cloud computing service provider Rackspace in 2017, securing a $50 million financing round led by Turn/River Capital, Rackspace, and San Antonio investment fund Scaleworks in the process. Turn/River, a San Francisco-based investment firm that has previously acquired companies from San Antonio-based Rackspace, is maintaining a minority stake in Mailgun. Scaleworks exited the investment, the firm said Monday. Other financial terms of the deal weren’t disclosed.

“I think this is a huge investment and validation for San Antonio,” Lew Moorman, a Scaleworks co-founder and general partner, said in an e-mail sent by a spokesperson. “Continued investment and growth will lead to a big future and leadership position in a great category for Mailgun.”

Rackspace declined to comment on whether it stayed on as an investor. Mailgun hasn’t responded to a request. Founded in New York, Mailgun went through the Y Combinator incubator program before being acquired by Rackspace. The business has more than 150,000 customers, including Slack, Stripe, and Lyft, which use it to send customers receipts and promotions, CEO William Conway told Xconomy in 2017. He also said that it is profitable.

The value of the product for software developers is in the various application program interfaces (APIs) Mailgun has made, which allow developers to integrate Mailgun’s various services with their internal applications or business intelligence tools, Conway said at the time. That can help a developer work through problems as simple as making sure e-mails are delivered the right way—like making sure a receipt doesn’t get hidden behind marketing material—to more complex tasks, such as as tracking down data logs that Mailgun has stored to understand why an e-mail failed to be delivered, Conway said.

Thoma Bravo is an active private equity investor in software businesses. Its previous infrastructure software investments include Austin-based Solarwinds and Irvine, CA-based Kofax, among others, the firm noted in a news release.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at [email protected] Follow @xconholley

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