Prelude is a relatively new French startup that focuses on SMS verification; it’s announcing new funding from Singular and Seedcamp on Wednesday. The two founders met when they were working for Zenly, a popular location-sharing app with tens of millions of users that was acquired by Snap (and later shut down). While you might not think much about those verification codes, the Zenly team thought about this topic quite intensely. It turns out that it’s extremely tedious to implement SMS verification codes that work reliably.
“Initially, when I started looking at this problem at Zenly, we only had one provider. And honestly, when I joined the company, I thought it would be a problem that would be fixed in a couple of months and we could move on. As it turns out, I spent most of the three years I stayed at Zenly on this issue, and we built a team around it,” Prelude co-founder and CEO Matias Berny (pictured above on the left) told TechCrunch.
You probably don’t pay for text messages on your personal phone, but telecom providers still charge companies for those text messages. And if you have a massive user base, SMS verification can become an extremely expensive cost center.
In late 2023, the Signal Foundation shared its operating budget for its popular messaging app and service; SMS verification codes alone cost $6 million per year. As a comparison, storage, servers, and bandwidth account for $7 million per year altogether.
You might think that it’s expensive, but — at least — that this is a problem that has already been fixed. A few years ago, Twilio made it easy to send SMS using programmatic calls, after all. Other companies followed suit with SMS verification APIs.
But when you request a verification code, the request is passe …