SAN FRANCISCO (AP) — Twilio is buying customer data start-up Segment in a stock deal valued at about $3.2 billion as demand for cloud technology surges during the pandemic.

Both companies are based in San Francisco and Segment will become part of the cloud computing company.

"By joining forces and applying our customer data platform to Twilio's engagement cloud, we'll be able to make the entire customer experience seamless from end-to-end," Segment co-founder and CEO Peter Reinhardt said in a prepared statement Monday.

The boards of both companies have approved the deal, which is expected to close in the fourth quarter.

Twilio Inc. has grown explosively this year with demand for cloud technology growing as millions work from home with COVID-19 infections unchecked in the U.S.