TextMagic acquires Estonian website builder Voog for €1,1M

Estonian business text messaging service TextMagic acquires 100% of Estonian website building platform Voog for €1,1M. TextMagic purchased stakes of 16 shareholders. Some of them are current employees, who had just received shares through the stock option program. The other shareholders are co-founders of Voog, Tõnu Runnel, Märt Kelder, Priit Haamer, Toivo Annus, and CEO Henn Runnel. The deal will come into force on June 1, 2023.

Voog was founded at the end of 2007 under the name of the digital design agency Fraktal. In 2011, the company split into two - Fraktal and Edicy. Later, Edicy was redesigned, and rebranded into Voog, a tool for creating and managing multilingual websites. Voog also provides tools for developers to build websites with more options for design and functionality. The company has over 5K paying customers. Its sales revenue for 2022 totaled about €600K.

TextMagic was founded by Dan Houghton in the UK in 2001. In 2007, the current CEO and core shareholder Priit Vaikmaa, joined TextMagic, and in 2013 concluded a management buyout. Text Magic owns an A2P SMS platform that offers business text messaging services. The tool helps to send notifications, alerts, reminders, confirmations, and SMS marketing campaigns. In 2022, TextMagic generated revenue of 13,83M, with over 80% from the US and UK, and EBITDA of 6,24M. It operates mainly in the US, the UK, Canada, and Australia. TextMagic is a publicly listed company, traded on the Tallinn Nasdaq First North. Its headquarters are in Estonia.

After the deal, the CEO of Voog Henn Runnel will continue to lead the company. Also, he will recruit additional developers, marketers, and product specialists. Voog aims to reach the US market. Currently, 90% of its revenue comes from Estonia and the rest - from the global market, whereas TextMagic is receiving nearly 70% of its revenue from the US market.

According to Priit Vaikmaa, the Voog acquisition is the first M&A deal in TextMagic portfolio. TextMagic has a strategic focus on building, buying, and managing a diverse SaaS products portfolio to strengthen its position in the market, particularly in the US. The company also plans to grow from the launch of the Touchpoint customer support software and a new version of TextMagic’s text message communication platform in the second half of 2023.