Managed service platform and tools vendor gets $500 million in funding
Kaseya is getting ready to go on a spending spree now that it’s landed $500 million in fresh funding to fuel its M&A ambitions.
The Lowdown: The company announced today that it’s received a massive finance injection from its existing venture backer, Insight Ventures, and new investor TPG. In April, Kaseya announced that TPG was taking a minority stake in the firm, but gave no indication that the cash infusion would tally nine figures.
The Details: Kaseya says it’s growing 30% annually as it continues to expand its portfolio of managed service tools and support systems. Kaseya markets its products to enterprises as IT management and automation tools, while also selling applications and resources to managed service providers for remote systems support.
The funding and strategic guidance provided by Insight and TPG will fuel Kaseya’s ambitions to drive growth through mergers and acquisitions. Kaseya sees a huge market opportunity for managed services, citing research by MarketsandMarkets that projects the segment will grow from $180 billion today to $282 billion by 2023.
Kaseya already has made several acquisitions to expand its portfolio, including Unitrends, Spanning Cloud Apps, RapidFire Tools, and IT Glue.
The Impact: A half-billion-dollar war chest gives Kaseya the financial muscle to reshape the managed service segment and channel. Over the past two years, the segment has seen the consolidation of Datto and Autotask, the private equity buyout of ConnectWise, and the repositioning of Continuum. Each of the managed service platform companies has followed a path of mixed growth, organically and through acquisition, but none has achieved the scale possible with Kaseya’s funding.
“Technology is becoming more critical for small to midsize businesses every day, and whether they receive it from a managed service provider or their own internal IT department, they want more efficient solutions that yield greater results,” said Fred Voccola, CEO of Kaseya. “We’re excited to partner with TPG, who will help us explore opportunities to continue our growth and deepen our commitment to the market, our products, and our customers’ success. This investment validates our position as the only industry player that can offer these innovative, integrated solutions from a single pane of glass. We remain highly focused on increasing investment in our products and customers and look forward to serving this fast-growing market long into the future.”
“We are very excited about our investment in Kaseya’s future growth,” said Nehal Raj, partner at TPG. “Kaseya is a leading player in today’s rapidly growing IT infrastructure management market, offering best-in-class, integrated technology at a compelling price point. The company’s innovative products, skilled management team, and strong customer base position them well for continued success, and we look forward to working together to build and enhance the platform.”
“We’re excited about what this investment means for Kaseya’s ability to continue to innovate offerings and to expand their acquisition strategy. Kaseya’s acquisition targets to date have been aligned with the needs of our organization and have been well-adopted here,” said Dan Shapero, president of TeamLogic, one of Kaseya’s MSP customers. “We have confidence in Kaseya’s ability to identify acquisition targets that help the TeamLogic IT network grow profitably, and we place great value on [IT Complete], Kaseya’s integrated platform for serving the evolving needs of the MSP. I look forward to how IT Complete will continue to innovate and expand to help us grow our business and support both our franchise owners and their customers.”
“We’re very pleased and welcome this great news from Kaseya,” said Ken Roulston, managing director at CMI, an IT service provider in the United Kingdom. “With so much turmoil in the industry as vendors are being acquired and companies are selling out to large investors, it’s good to know that Kaseya remains a pillar of stability and consistency in the market, and that they will continue with their current strategy, while remaining a strong committed partner for the foreseeable future.”