Buried within Braze's recent earnings calls lies a subtle clue to the company's explosive future: WhatsApp. While the headlines focused on AI innovations and legacy vendor displacement, Braze's WhatsApp adoption story is quietly unfolding, potentially holding the key to a billion-dollar valuation.

Braze has a history of cautiously introducing and carefully scaling new channels. We saw this with both email and SMS. However, with WhatsApp, the story is different. The rapid adoption rates and the company's admission that customers are "legging into their purchased volumes much, much more quickly" indicates a channel experiencing explosive growth.

This isn't just a happy accident. WhatsApp's global reach, particularly in emerging markets, perfectly aligns with Braze's international expansion strategy. Countries like Brazil, India, and Indonesia, where WhatsApp is the dominant messaging platform, are now home to new Braze offices, demonstrating a strategic alignment rarely seen this early in a channel's lifecycle.

Hypothetical Growth in Customer Count Driven by WhatsApp Adoption

The following chart illustrates a potential scenario for Braze's customer growth, driven by WhatsApp's penetration into the SMB market.

But why is this WhatsApp explosion so significant? It points towards a fundamental shift in Braze's addressable market. While email and SMS remain essential, their reach is limited compared to WhatsApp's 2 billion-plus users. This massive audience opens doors to entirely new customer segments, particularly in the SMB market.

Imagine small businesses in Indonesia, previously unable to afford sophisticated customer engagement solutions, now accessing Braze through cost-effective WhatsApp campaigns. This scenario, enabled by WhatsApp's low-cost, high-engagement nature, transforms Braze from a primarily enterprise-focused solution into a ubiquitous platform for businesses of all sizes.

The numbers support this hypothesis. Braze currently boasts a $500 million ARR with around 2,000 customers. Bill Magnuson, Braze's CEO, projects needing 4,000 to 5,000 customers to reach a billion-dollar valuation. Considering WhatsApp's potential to penetrate the vast SMB market, particularly in high-growth regions, achieving this customer growth becomes significantly more attainable.

However, this WhatsApp explosion isn't without its challenges. As Isabelle Winkles, Braze's CFO, highlighted, the channel's lower margins put pressure on the company's near-term profitability. But this is a temporary hurdle. As Braze scales its WhatsApp operations, cost optimization through bulk pricing and technological efficiencies will naturally improve margins, just as it did with email and SMS.

"Interestingly, the very factors challenging Braze's near-term profitability might be the secret ingredient for long-term success. By driving rapid WhatsApp adoption, Braze is building an early lead in a channel poised to dominate global customer engagement. This first-mover advantage, coupled with Braze's existing strengths in cross-channel orchestration and personalization, positions the company to capture a disproportionate share of this rapidly expanding market."

Think of it this way: Braze is playing a long game. They're sacrificing some near-term margin to establish dominance in a channel projected to reach 3 billion users by 2028. This strategic bet, if successful, could propel Braze far beyond a billion-dollar valuation, potentially solidifying its position as the global standard for customer engagement.

This isn't just about sending messages. It's about building lasting, meaningful connections with customers worldwide. And through the power of WhatsApp, Braze is quietly positioning itself to lead the charge.

"Fun Fact: WhatsApp messages are end-to-end encrypted, meaning that only the sender and recipient can read them, not even WhatsApp itself. This commitment to privacy is a major draw for users, particularly in regions with concerns about data security."