IT and Business Insights for SMB Solution Providers

Kaseya Raises Half a Billion Dollars of Fresh Capital

Participants in the investment round, which comes amid an ongoing merger and acquisition spree by the IT management vendor, include TPG, a global private equity giant with some $103 billion of assets under management. By Rich Freeman

IT management vendor Kaseya Ltd. has completed an investment round worth over $500 million.

Contributors to the new funding pool, which was raised amidst an ongoing merger and acquisition spree by the IT management vendor, include TPG, a global private equity giant with roughly $103 billion of assets under management. Insight Partners, the private equity investor that acquired Kaseya in 2013, participated as well.

“Technology is becoming more critical for small to mid-size 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 Kaseya CEO Fred Voccola in prepared remarks.

“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.”

Kaseya grew roughly 32.5 percent in 2018 while recording over $250 million in annual bookings. The company has been investing sizeable portions of its profits in a string of recent acquisitions that include BDR vendor Unitrends, security vendor RapidFire Tools, cloud-to-cloud backup vendor Spanning, and managed services documentation vendor IT Glue.

“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.”

Private equity firms are pouring money into the managed services market generally and managed services platform providers specifically at present. Thoma Bravo, for example, bought managed services pioneer ConnectWise earlier this year, and master MSP Continuum in 2017. It also holds a stake in SolarWinds. Vista Equity Partners, meanwhile, bought Datto Inc. and merged it with Autotask, another of its holdings, late in 2017.

All of those vendors are building increasingly comprehensive suites of software for running a managed services business, including RMM and PSA software, as well as various combinations of BDR, security, networking, and network management products.

Acquisitions have played a significant role in those efforts. This year alone, Continuum has bought reporting vendor BrightGauge and SolarWinds has bought password management vendor Passportal.

Specific TPG units participating in Kaseya’s investment round include TPG Growth, the company’s middle market and growth equity investment platform, and TPG Sixth Street Partners, TPG’s credit and financing solutions arm.

Other companies in TPG’s portfolio include Box, McAfee, and Seagate, as well as AirBnB, Spotify, and Uber.

News of Kaseya’s fund-raising arrives on the eve of the vendor’s Kaseya Connect partner event, which takes place in Las Vegas next week.

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