2013 is turning out to be the year of the vendor as we have seen a number of managed services and cloud enabling technology companies receive equity investments and/or get acquired. Now, we can add Datto to this list as they have just announced a $25 million investment from General Catalyst Partners.
Datto, the hardware and cloud based backup vendor with more than 5,000 MSPs, VARs, and IT Service Providers in both North America and Europe, has been gradually making headway in the MSP channel for some years now. While the backup technology sector has been somewhat crowded, a few vendors (now including Datto) have been able to demonstrate long term viability and resources, primarily through organic and funding methods.
Datto says it will use the funding to focus on three major areas of growth including international expansion, new product development for wider market penetration, and enhanced services for existing customers. Datto will also be adding two individuals to its board to help guide and advise on expansion efforts. Steve Herrod, former CTO of VMware and managing director at General Catalyst Partners, and Paul Sagan, executive vice chairman of Akamai Technologies, will provide valuable direction as Datto broadens its product portfolio and continues to grow its international presence.
“This is an exciting time for Datto and our channel partners,” explained Austin McChord, Datto Founder and CEO. “I believe that Steve and his team at General Catalyst Partners, and Paul with his breadth of industry knowledge, will add unique value based on their experience and foresight. They have a truly deep understanding of the business and culture of Datto, and this investment will help us further the rapid growth of the company, and allow us to deliver solutions that will change the way businesses think about using the cloud for backup and disaster recovery around the globe.” McChord will remain majority stakeholder, and there will be no changes to Datto’s executive team.
The investment marks the continued investment and M&A activity this year that has focused on MSP enabling technologies, starting with the RMM transactions earlier this year. As I wrote earlier, now that the backup and RMM sectors are in play, my guess is the PSA vendors won’t be too far behind.