SendGrid vs Mailgun for Startups: Cheapest Plan at Each List Size
SendGrid or Mailgun for a startup? Compare free plans, paid tiers from $15 a month, and which provider costs less at 2,000, 10,000, 50,000 and 100,000 emails.
The short answer
For most early-stage startups that send both product email (receipts, password resets, onboarding messages) and an occasional newsletter, SendGrid is the better first pick. Its Marketing Campaigns Free plan covers up to 2,000 contacts and 6,000 emails a month at $0, and the paid Basic tier is $15 a month for up to 100,000 contacts and 300,000 emails. A startup with a small send volume but a growing list gets the most from that structure.
Mailgun is the better pick when you only need a sending API and your volume is steady. Its Basic plan is $15 a month for 10,000 emails, and the Free plan allows 100 emails a day. If you do not need a contact list or campaign tools inside the vendor, Mailgun gives you a simpler bill with one thing to track.
The right answer depends on what you are counting. SendGrid's marketing tiers are sized by contacts and emails together. Mailgun's plans are sized by emails alone. A startup with 1,500 contacts sending two campaigns a month is in a very different position from a startup with 40,000 contacts receiving a weekly digest, and the tables below show where each provider becomes the cheaper option.
How the prices are counted
Before comparing numbers, it helps to know what each price is attached to. The prices below are the list prices shown on each vendor's public pricing page. Each one is given with its plan name and billing basis so you can match it to the pricing page yourself. Prices can change, so confirm the figure at checkout.
SendGrid sells two overlapping products. The Email API is priced by email volume. It has a free trial of 100 emails a day for 60 days, then paid plans: Essentials at $19.95 a month, which the plan selector places at 50,000 to 100,000 emails; Pro at $89.95 a month, for 100,000 to 2,500,000 emails; and Premier, which is custom-priced for 2,500,000 emails and above. Marketing Campaigns is priced by contacts and emails together. Its free plan covers up to 2,000 contacts and 6,000 emails a month. Basic is $15 a month for up to 100,000 contacts and 300,000 emails, Advanced is $60 a month for up to 200,000 contacts and 1,000,000 emails, and Custom covers anything above that.
Mailgun sells monthly email-volume plans. The Free plan allows 100 emails a day with the RESTful API and SMTP relay. Basic is $15 a month for 10,000 emails, Foundation is $35 a month for 50,000 emails, and Scale is $90 a month for 100,000 emails. Foundation and Scale include one month free before the monthly price starts. Mailgun also bills usage-based overages for email and email validation beyond the plan allowance, so your real monthly figure can be higher than the plan price once you exceed the included volume.
The comparison at a glance
The table below summarizes what each provider is best at, its lowest paid price with the plan and billing basis, and the limitation that usually decides the choice.
| Tool | Best for | Entry paid price (plan, billing) | Free option | Key limitation |
|---|---|---|---|---|
| SendGrid | Startups that send product email and a newsletter from one account | Marketing Campaigns Basic, $15/month, up to 100,000 contacts. Email API Essentials, $19.95/month, monthly billing | Marketing Campaigns Free: up to 2,000 contacts and 6,000 emails/month. Email API trial: 100 emails/day for 60 days | Two products with separate limits, so you need to track which one each send counts against |
| Mailgun | Developers sending transactional email at a steady volume | Basic, $15/month for 10,000 emails/month | Free: 100 emails/day | The listed plans cover sending only. Contact lists and campaign tools are not part of them, so a newsletter needs a second tool |
Neither provider is cheapest at every size. Mailgun has the simplest low-volume sending plan at 10,000 emails a month. SendGrid is the stronger choice when the contact list is what is growing, because its marketing tiers include contacts and a free layer for small lists.
What each plan costs at real list sizes
The second table gives the plan that applies at five monthly volumes. Where a provider does not list a fixed price for a volume, the table says so instead of estimating.
| Emails per month | SendGrid plan and price | Mailgun plan and price | What to note |
|---|---|---|---|
| Up to 6,000 (list under 2,000 contacts) | Marketing Campaigns Free, $0 | Free, $0 (100 emails/day, which is about 3,000 in a 30-day month) | SendGrid's free plan also covers a contact list. Mailgun's free plan does not include one |
| 10,000 | Marketing Campaigns Basic, $15/month, if the sends go through Marketing Campaigns. The Email API has no listed plan below 50,000 emails | Basic, $15/month | At this volume the two are equal on price, but only if the list sits inside SendGrid's Marketing Campaigns tiers |
| 50,000 | Essentials, $19.95/month (Email API, 50,000 to 100,000 emails). Marketing Campaigns Basic, $15/month, if the list is up to 100,000 contacts | Foundation, $35/month (first month free) | SendGrid is the lower price here for sending alone. Mailgun's one-month trial applies to Foundation |
| 100,000 | Essentials, $19.95/month (within its 50,000 to 100,000 range) | Scale, $90/month (first month free) | The gap is about $70 a month in SendGrid's favor. Confirm the figure the SendGrid plan selector shows for your exact count before you sign up |
| 300,000 | Pro, $89.95/month (Email API range 100,000 to 2,500,000 emails) | Pricing on request. The listed plans end at Scale (100,000 emails), and higher volume is billed on usage | SendGrid gives a fixed monthly price in this range. Mailgun's price at this volume is on request |
| 1,000,000 | Pro, $89.95/month (Email API range up to 2,500,000 emails). Marketing Campaigns Advanced, $60/month, covers up to 200,000 contacts and 1,000,000 emails | Pricing on request | If your list is under 200,000 contacts, the Advanced marketing tier is the lower fixed price on SendGrid's pricing page |
Two patterns stand out. First, at the small end the free plans do most of the work. A startup with a few thousand contacts can run a newsletter and product email at $0 on SendGrid, and a startup with a purely transactional load can run on Mailgun's free daily allowance until it grows. Second, once volume passes 50,000 emails a month, the cheaper option depends on whether you also need a contact list. A pure sending bill favors SendGrid's Essentials tier at $19.95 a month. A bill that has to hold a list of 100,000 people favors SendGrid's Marketing Campaigns tiers, because the contact count is part of the plan price.
SendGrid for startups
What it does well
SendGrid's main advantage for a startup is that it can cover two jobs with one account. Product email (confirmations, password resets, invoice notices, onboarding steps) runs through the Email API. Newsletters, announcements and lifecycle campaigns run through Marketing Campaigns, which keeps the contact list. A founder who does not want a separate newsletter tool can keep everything under one vendor and one login.
The free layer is also useful at the early stage. Marketing Campaigns Free covers up to 2,000 contacts and 6,000 emails a month, which fits a waitlist, a beta group or a small paying base. Because the free plan is tied to contacts, you can grow the list to that ceiling without changing vendors. When the list passes 2,000 contacts, the Basic tier at $15 a month covers up to 100,000 contacts.
Where it falls short
The main drawback is that SendGrid has two products with separate limits. A send can count against the Email API or the Marketing Campaigns quota, depending on how it is triggered. A startup that sends a mix of product messages and newsletters should map which emails use which product before it sets a budget. The Email API free offer is also time-limited: 100 emails a day for 60 days. It is a trial, not a permanent free allowance. The permanent free layer is the Marketing Campaigns plan, and it is capped at 6,000 emails a month.
SendGrid is also less direct for a developer who only wants to send messages through an API. The product is broader, and that breadth means more settings to learn during setup. Teams that want a simple sending API may find Mailgun's surface area easier to reason about.
Price
The lowest paid entry points are Marketing Campaigns Basic at $15 a month (up to 100,000 contacts and 300,000 emails) and Email API Essentials at $19.95 a month (50,000 to 100,000 emails in the plan selector). Pro is $89.95 a month for 100,000 to 2,500,000 emails. Check the pricing page for the exact result at your contact and email counts, because the plan selector moves with both figures.
Pricing page: SendGrid pricing on the Twilio site.
Mailgun for startups
What it does well
Mailgun fits a startup whose email is mostly transactional and whose volume is predictable. Its Basic plan at $15 a month for 10,000 emails is one of the simplest sending prices in this comparison. Foundation at $35 a month for 50,000 emails gives a clear step up as the product grows. The Free plan's 100 emails a day lets a new product send real messages before any payment is due.
Mailgun also gives one month free on Foundation or Scale before the monthly price starts. For a startup that expects a volume jump at launch, that month gives time to set up sending domains and check deliverability on a paid plan before the first full bill arrives.
Where it falls short
Mailgun's listed plans cover sending volume. They do not include a contact list or a campaign builder, so a startup that wants a newsletter or an onboarding sequence has to pick a second tool and connect it. That adds one more vendor, one more bill and one more place where a contact can be wrongly unsubscribed or counted twice. Above the 100,000-email Scale plan, Mailgun's pricing page does not list a fixed price, and overages on email and validation are billed on usage. That makes budgeting harder for a company that is growing quickly.
Price
Basic is $15 a month for 10,000 emails. Foundation is $35 a month for 50,000 emails, and Scale is $90 a month for 100,000 emails. Foundation and Scale include one month free before billing starts. The Free plan allows 100 emails a day. Overages on email and validation are billed on top of the plan, so read the current overage rates on the pricing page before you commit to a plan near its limit.
Pricing page: Mailgun pricing.
Decision table: which provider for which need
The table below turns the comparison into a set of choices. Find the line that matches your situation, then confirm the price on the vendor's pricing page before you commit.
| If you need | Pick | Because |
|---|---|---|
| A newsletter and product email from one vendor, under 2,000 contacts | SendGrid Marketing Campaigns Free | The free plan covers up to 2,000 contacts and 6,000 emails a month at $0 |
| Product email only, around 10,000 emails a month | Mailgun Basic | $15 a month for 10,000 emails is the lowest paid price for this volume in the comparison that applies to sending alone |
| A contact list growing past 2,000, with a weekly send | SendGrid Marketing Campaigns Basic | $15 a month covers up to 100,000 contacts and 300,000 emails |
| Steady volume of 50,000 emails a month, no contact list | SendGrid Essentials or Mailgun Foundation | SendGrid Essentials is $19.95 a month for this range. Mailgun Foundation is $35 a month, with the first month free |
| A fixed monthly price at 300,000 emails | SendGrid Pro | $89.95 a month covers 100,000 to 2,500,000 emails. Mailgun's price at this volume is on request |
| A paid trial before a volume commitment | Mailgun Foundation or Scale | Both include one month free before the monthly price starts |
| Sending at $0 while you validate the product | Either free plan | Mailgun's Free plan is 100 emails a day. SendGrid's Marketing Campaigns Free plan is capped at 2,000 contacts and 6,000 emails a month |
How to choose at each stage
Most startups do not stay in one pricing band. The sensible approach is to match the provider to the stage you are in now and the stage you expect within the next twelve months.
Before launch. You have a waitlist, perhaps a few hundred contacts and almost no sending history. Pick the free layer that covers your list. If the list is in the low thousands and you want campaigns, SendGrid Marketing Campaigns Free is the cheapest complete setup. If you only need to send a verification code and a welcome email, Mailgun's 100 emails a day is enough to start.
First paying customers. Product email becomes the main load: receipts, invoices, password resets and onboarding steps. This is where the cost of a contact list starts to matter. If you add a newsletter at this stage, SendGrid keeps both jobs in one account. If the newsletter can wait, Mailgun's Basic plan at $15 a month for 10,000 emails is the simplest sending price in this comparison.
Growth. Volume passes 50,000 emails a month and the contact list is in the tens of thousands. The choice is now about predictable cost. SendGrid's Pro plan gives a fixed $89.95 a month up to 2,500,000 emails. Mailgun's listed plans stop at Scale (100,000 emails), and above that the price depends on usage and is on request. A company that wants to forecast its bill usually prefers a fixed price, even if the starting bill is a little higher.
Migration and setup checklist
Switching providers in the middle of growth is a common reason startups lose deliverability for a few weeks. The table below lists the steps that matter most in either direction. Work through them in order, and do not skip the authentication step.
| Step | What to do | Why it matters |
|---|---|---|
| 1. Authenticate the sending domain | Add the DNS records the new provider gives you for SPF and DKIM, plus a DMARC policy. Verify them before any live send | Receiving mail servers use these records to check that messages are genuine. A missing record can send legitimate mail to spam |
| 2. Separate the streams | Send transactional email (receipts, resets) from a different subdomain than newsletters and campaigns | A problem with marketing sends should not slow down password resets. It also makes the two SendGrid products' quotas easier to track |
| 3. Export and clean the list | Export contacts, remove hard bounces, and remove anyone who has unsubscribed or complained | Importing bounced or unsubscribed addresses damages sender reputation on the new platform |
| 4. Import suppression lists | Bring over the unsubscribe and complaint lists as suppressions, not as ordinary contacts | Mailing an address that has opted out is the fastest way to lose both trust and deliverability |
| 5. Wire up event webhooks | Route bounce, complaint and delivery events back into your application's database | Your product needs to know when an address is dead so it stops sending to it |
| 6. Pilot with a small segment | Send to a small, engaged group first and check inbox placement across the major mail providers | A small pilot reveals configuration errors while the cost of a mistake is still low |
| 7. Cut over, then keep the old account open | Move production sends, then leave the previous account active until bounce and complaint events stop arriving | Late bounces from the old provider are normal, and closing the account too early hides them |
Lifecycle email on a startup budget
Whichever provider you choose, the hard part of startup email is rarely the sending. It is deciding which message goes to which customer at which point. A new trial user needs onboarding steps. A paying customer whose card fails needs a clear message with a link to update billing. A customer who cancels needs a different sequence from one who simply stopped logging in. Neither SendGrid nor Mailgun models those states on its own. You define them from your product events, and the sending provider delivers the result.
That means the cheapest setup is usually the one that keeps product events and sending close together. Send transactional messages from your application through the provider's API, and treat newsletters as a separate stream with its own list. Keep the unsubscribe state in one place, so that a customer who opts out of marketing is removed from campaigns but still receives required billing and security messages.
With SendGrid, this usually means using the Email API for event-triggered messages and Marketing Campaigns for scheduled sends to the list. With Mailgun, it means sending everything through the API and building any campaign logic in your own application or in a separate tool. Either way, make sure delivery and bounce events flow back into your database, because the decision to email a customer again depends on whether the last message was delivered, bounced or complained about.
Alternatives if neither fits
If your sending volume is small and you want a cheaper entry point than either option above, two other providers list free tiers on their pricing pages. Postmark's Free plan allows 100 emails a month with no overages, and its Basic plan starts at $15 a month for 10,000 emails. Resend's Free plan allows 3,000 emails a month, 100 emails a day and 3 domains, and its Pro plan is $20 a month for 50,000 emails. Resend's marketing plans also list contact-based tiers, including a free layer for up to 1,000 contacts.
Neither is a full substitute for SendGrid's Marketing Campaigns if you need a large list and a visual campaign builder. Neither publishes the same contact-based price ladder at the top end that SendGrid does. For a team that only needs a clean sending API and a predictable bill, they are worth comparing at the same list size before you decide. For the full range of tools in this category, go to the homepage.
Pricing pages: Postmark pricing and Resend pricing.
Frequently asked questions
Is SendGrid's free plan permanent?
The Marketing Campaigns Free plan covers up to 2,000 contacts and 6,000 emails a month, as listed on SendGrid's pricing page. The Email API free offer is a trial of 100 emails a day for 60 days. Read both limits on the pricing page before you rely on either one for production sends.
Which is cheaper for 10,000 emails a month?
Mailgun's Basic plan is $15 a month for 10,000 emails. SendGrid's Email API has no listed plan below 50,000 emails, so for product email alone at this volume Mailgun is the clear price. If the sends go through SendGrid's Marketing Campaigns and the list is within its tiers, Basic is also $15 a month.
Does Mailgun include a contact list or newsletter builder?
The plans on Mailgun's pricing page cover email sending through the API and SMTP relay. They do not describe a contact list or a campaign builder. If you need a newsletter, plan to add a second tool or build the sends in your application.
What is the biggest hidden cost with either provider?
For SendGrid, the risk is counting sends across two products with separate quotas. For Mailgun, the risk is usage-based overages above the plan's included volume. Track both from the first month, and compare each invoice with your own send log before you move to a larger plan.
Can I start on a free plan and move up later?
Yes. Both providers let you begin on a free tier and move to a paid plan as volume grows. Choose the free plan that matches your current list size, then choose the paid plan that matches your next six months of sending rather than today's traffic alone.
Do I need a separate domain for newsletters?
It is a sensible precaution. Sending transactional and marketing mail from separate subdomains lets you protect password resets and billing messages if a campaign draws complaints. Both providers support authenticated sending domains, and the setup steps in the checklist above apply to each one.
Which provider is better for a developer-led team?
Mailgun is the simpler choice when the team wants a sending API and nothing else. SendGrid is the better choice when the same team also needs to send campaigns to a contact list without adding another vendor. Both expose an API, so the decision usually comes down to whether you want one product or two.