The archive · Developer & Business Tools · Product decision · 2010–2011
Mailgun bets developers rent email plumbing; $1.1M from SV Angel and Milner
Mailgun's $1.1M round banked its 'Twilio for email' bet: developers rent email plumbing through an API, priced per message like AWS rather than per mailbox.
Mailgun
What the business is
Mailgun is an email service provider for developers: an API that sends, receives, parses, stores and searches email, with AWS-style pricing per message and per gigabyte.
Starting capital：$1.1M in May 2011 from SV Angel, Yuri Milner, Maynard Webb, Paul Buchheit and Geoff Ralston; Milner had already invested through the Start Fund.
How it started
Founder Ev Kontsevoy started Mailgun to give developers a way to programmatically create and manage mailboxes with a straightforward API — 'Twilio for email'. The company went through Y Combinator, where many early clients were fellow YC teams, a pattern YC cofounder Paul Graham read as a good indicator for traction. TechCrunch covered the launch in October 2010.
What happened
By May 2011 Mailgun had grown from a SendGrid-style sending service into a fuller provider that could send, receive, parse, store and search email through its API, with 600 clients (about 400 free, 200 paid) on plans charging $1 per 1,000 messages and $1 per GB-month. On 13 May 2011 it announced a $1.1M round from SV Angel, Yuri Milner, Maynard Webb, Paul Buchheit and Geoff Ralston. Kontsevoy framed the mission as bigger than APIs: 'everything is a mailbox' — site comments, private messages and blogs all candidates for the 'new email'.
No ending yet — it is still running.
Background
Mailgun is an email infrastructure company for developers, founded by Ev Kontsevoy to make email as easy to build into an app as Twilio made telephony. Its API lets developers create and manage mailboxes and send, receive, parse, store and search messages programmatically, priced by usage rather than by mailbox.
The company went through Y Combinator, where many of its earliest clients were fellow YC teams — a pattern Paul Graham considered a good sign for traction. TechCrunch first covered the startup in October 2010, when its feature set was comparable to SendGrid, and revisited it in May 2011 after it had evolved into a fuller email service provider.
On 13 May 2011 Mailgun announced a $1.1M round from SV Angel, Yuri Milner, Maynard Webb, Paul Buchheit (creator of Gmail) and Geoff Ralston (creator of Yahoo Mail). At the time it reported about 600 clients, roughly 400 free and 200 paid, on plans starting at 200 messages per day free and $1 per 1,000 messages paid.
The founders' stated bet went beyond sending: in Kontsevoy's words, 'everything is a mailbox' — comments, private messages and blogs were all candidates for programmable email, which meant replacing the in-house email systems that startups like Posterous had to build themselves.
What has to be true
- Mailgun's customers were the proof of the thesis: YC classmates had already spent months building email systems by hand, so the pain was named before the first sales call.
- AWS-style metered pricing opened a market that per-mailbox ESP pricing had closed to most developers, letting small apps pay a few dollars instead of committing to mailbox counts.
- The investor list — Buchheit, Ralston, Milner — read as a bet that email expertise and distribution would matter as the product moved beyond sending into parsing and search.
- Framing every message surface as a 'mailbox' gave Mailgun a wider target than transactional sending, which was already crowded with SendGrid and others.
What can be applied
Sell to people who already built the thing by hand: YC classmates who had just written their own email systems became Mailgun's first clients, making the pitch nearly self-selling.
Aftermath
As of 13 May 2011 Mailgun was live with roughly 600 clients, about 200 of them paying, and had just closed a $1.1M round whose investors included the creators of Gmail and Yahoo Mail. The company was expanding from sending mail to the full send-receive-parse-store-search loop and positioning itself against both SendGrid-style senders and traditional per-mailbox ESPs.
Sources
- Mailgun Raises $1.1 Million For Its 'Twilio For Email'
- Mailgun Gives Developers An API For Creating And Managing Online Mailboxes
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