Web Host Rackspace Acquires Mailgun to Add Email Services for Developers

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Cloud and web hosting provider Rackspace announced on Tuesday it has acquired Y Combinator startup Mailgun, which offers an API for creating and managing online email inboxes for apps and websites. The terms of the acquisition, which is expected to close this week, were not disclosed in the press release.

Mailgun’s main selling point seems to be its ease of use, armed with effective routing to perform many programmable email functionalities to web apps and web pages.

The acquisition will also further differentiate Rackspace’s offerings and directly appeal to those web developers looking for an automated email hosting service.

Following the launch of the Rackspace Open Cloud, the acquisition will further expand the cloud hosting firm’s product portfolio, and allow Rackspace customers to quickly integrate cloud-based email services into applications and websites.

“Rackspace is dedicated to providing the tools that our customers need to build their technology stack on the Rackspace Open Cloud,” said Pat Matthews, senior vice president of corporate development at Rackspace. “Mail is a core component of nearly every website and application today. Our customers are asking for this and Mailgun is the right company to help us deliver it in a tightly integrated way.”

Built for developers, Mailgun provides a set of APIs that allows users to send, receive, and track email easily from within their applications, all without having to manage an email server or having any expertise.

Mailgun’s full-featured email service allows customers to engage their users, and provides all the analytics and data needed to measure the impact.

The company is growing by 20 percent a month servicing customers such as 37Signals, Parse, and Financial Times Growing, along with being integrated into platforms such as Heroku, AppFog and Engine Yard.

Following the completion of the acquisition, the Mailgun team will remain in its native San Francisco.

Perhaps the most difficult challenge up ahead for Rackspace is to seamlessly integrate Mailgun into its portfolio of offerings and communicate to app developers how a programmable email service will benefit them.

Earlier this year, Rackspace acquired SharePoint consulting and training services provider SharePoint911.

Talk back: Do you think this acquisition of Mailgun will further increase Rackspace’s market share, particularly in email hosting? Are you currently offering a comparable product to Mailgun’s email services? Let us know your thoughts in the comments.

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