Private equity, IT management, Midmarket, MSP, Content

Kaseya Raises $500M, Pursues Strategic Acquisitions

Kaseya has raised another $500 million in private equity funding and now has a $1.75 billion valuation, the IT software management company confirmed this morning. The move sets the stage for Kaseya to make additional strategic acquisitions, the company stated.

Kaseya CEO  Fred Voccola
Kaseya CEO Fred Voccola

Key participants in the new round include private equity firms TPG and longtime owner Insight Venture Partners. Rumors about TPG buying a stake in Kaseya surfaced in April 2019, ChannelE2E reported at the time. Insight acquired Kaseya for an undisclosed sum in 2013.

Kaseya and each of its key rivals (ConnectWise, Continuum, Datto and SolarWinds MSP, among others)  have private equity backers. SolarWinds also returned to public markets in an October 2018 IPO and has a $5.79 billion valuation as of this writing, according to Yahoo Finance.

Armed with private equity dollars, each of the companies has been growing both organically and through M&A deals.

Kaseya Acquisitions: Key Deals

Kaseya, led by CEO Fred Voccola since July 2015, has been particularly active on the M&A front. Key deals during his tenure include:

  • IT Glue, an MSP documentation platform that Kaseya quietly owned for about two years before disclosing the relationship.
  • RapidFire Tools for network, security and compliance assessments.
  • Spanning Cloud Apps: A SaaS backup platform for Microsoft Office 365, Google G Suite and Salesforce that Insight had owned since 2017.
  • Vorex for PSA (professional services automation) software.
  • Unigma for cloud cost management.
  • Unitrends, a backup and disaster recovery that Insight had owned since 2013. The latest service launch involves Unitrends Cloud Backup (UCB) -- a direct-to-cloud service.

Kaseya Growth Rate, Business Model

Those deals coupled with organic growth helped Kaseya to grow its business more than 30 percent in 2018. The company now serves more than 40,000 customers worldwide, and its software manages over 10 million endpoints worldwide. The company has not disclosed actual revenue or profit figures.

Read between the lines, and Kaseya continues to have a hybrid sales model -- promoting IT management software to external service providers (MSPs) and internal service providers (corporate IT departments). The strategy mirrors that of SolarWinds.

In contrast, Datto and Continuum essentially are pure-play technology and service providers to MSPs. And ConnectWise has a hybrid approach for service providers and technology teams.

Kaseya: Next Moves

In prepared statements, Kaseya and Voccola hinted the company remains in M&A mode while also focusing on R&D for "single pane of glass" IT management capabilities.

Referring to the new investment dollars from firms TPG and Insight, Kaseya vowed to:

"use this investment and partnership to fuel growth through additional strategic acquisitions, deeper expansion into international markets, and increased R&D spending on cutting-edge, customer-centric products."

ChannelE2E will ping Kaseya for more information during the company's Connect IT 2019 conference starting May 7 in Las Vegas.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.