Rackspace to Acquire Mailgun for Easy Integration of Cloud-Based Email Services Into Applications & Websites

Rackspace HQ

Acquisition Will Further Enhance the Rackspace Open Cloud Platform

San Antonio, TX - August 28, 2012 - Today, Rackspace® Hosting (NYSE: RAX), the open cloud company, announced that it has entered into a definitive agreement to acquire Mailgun, Inc., a Y Combinator startup. On the heels of the Rackspace Open Cloud launch, the Mailgun acquisition will further enhance Rackspace’s product portfolio, making it easy to integrate cloud-based email services into applications and websites within minutes. The acquisition is expected to close this week.

“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 powerful set of APIs that allows users to send, receive, and track email easily from within their applications – without managing an email server or becoming an expert in email setup, operations and deliverability. This full-featured email service allows customers to engage their users, and optimize the email capability of their application and websites with all the analytics and data needed to measure the impact. The company is currently servicing customers such as 37Signals, Parse, Financial Times and many others. Growing by over 20 percent a month, Mailgun is also integrated into platforms such as Heroku, AppFog and Engine Yard.

“Mailgun is excited to join the Rackspace family. We believe in their open cloud strategy and we love the customer support mentality that permeates the company,” said Ev Kontsevoy, CEO and founder of Mailgun. “Like Rackspace, we want to provide developers with the right products to make the lives of developers easier and more productive. We look forward to continuing this mission with Rackspace and building a strong future together.”

Part of the Y Combinator winter 2011 graduating class, Mailgun is headquartered in San Francisco. The Mailgun team will remain in San Francisco which will add talented entrepreneurs and engineers to the growing presence Rackspace already has in San Francisco.

“Today, email integration into web apps is as important as your website presence itself because it provides the bridge for companies to talk with their customers or the community to talk to each other,” said Paul Buchheit, a partner at Y Combinator, the lead developer who created Gmail and a founder of FriendFeed. “I am excited for Mailgun to join Rackspace and to be able to provide this to more developers worldwide.”

About Rackspace

Rackspace® Hosting (NYSE: RAX) is the open cloud company, delivering open technologies and powering more than 190,000 customers worldwide. Rackspace provides its renowned Fanatical Support® across a broad portfolio of IT products, including Public Cloud, Private Cloud, Hybrid Hosting and Dedicated Hosting. The company offers choice, flexibility and freedom from vendor lock in. Rackspace has been recognized by Bloomberg BusinessWeek as a Top 100 Performing Technology Company and is featured on Fortune’s list of 100 Best Companies to Work For. Rackspace was positioned in the Leaders Quadrant by Gartner Inc. in the “2011 Magic Quadrant for Managed Hosting.” Rackspace is headquartered in San Antonio with offices and data centers around the world. For more information, visit www.rackspace.com.

Forward Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements concerning expected development, performance or market acceptance associated with the acquired products and services of Mailgun; anticipated operational and financial benefits from the acquired products and services of mailgun, including the implementation and use of such products or services into Rackspace product and service offerings; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include including the possibility that expected benefits from the mailgun products and services may not materialize because products and services are not generally accepted in the marketplace, which could occur due to certain factors including (i) a failure to market the acquired products and services cost effectively, differentiate the products and services from competitive products and services or communicate the differentiations effectively, (ii) the reliability, quality or compatibility associated with the acquired products and services, (iii) our inability to develop the acquired technology into our products or services effectively, (iv) changes in technology which adversely affect the benefits of the products or services, (v) internal strategy decisions that impact the products and services, and (vi) other risks that are described in Rackspace’s Form 10-Q for the quarter ended June 30, 2012, filed with the SEC on August 9, 2012. Except as required by law, Rackspace assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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