Vonage has entered into a definitive agreement to acquire Nexmo for $230 million in cash and stock, to increase its capabilities in the cloud communications for business market segment.

Nexmo is regarded as the second largest Communications Platform-as-a-Service, CPaaS, company by revenues, a market which IDC estimates will be worth $8 billion by 2018. Nexamo API’s for developers to embed contextual communications into mobile apps, websites and business workflows via text, social media, chat apps and voice, and has a customer base including companies such as Uber, Alibaba and Snapchat. Vonage claims following the acquisition it will have a total addressable market of nearly $28 billion by 2018.

“In 2014, we set out on a mission to become the clear leader in Cloud Communications for business. With the acquisition of Nexmo, we are now uniquely positioned to lead the market,” said Vonage CEO Alan Masarek. “By combining Vonage’s rapidly growing Unified Communications as a Service (“UCaaS”) business, with Nexmo, the second largest player in CPaaS, we are creating the future of Cloud Communications. These companies represent a set of strategic, technology and human resources assets that deliver the broadest services offering in our industry.”

Nexmo currently has more than 350 enterprise customers, 114,000 registered developers and processes 5 billion API calls annually, and its geographical footprint will allow Vonage to expand its influence in the EMEA and Asia Pacific markets.