Datto Hires CFO; Data Protection IPO On the Radar?
Datto has hired Timothy Weller as chief financial officer (CFO), the data protection company confirmed Tuesday. The CFO hire potentially suggests Datto is moving toward an initial public offering (IPO), and reinforces the company’s expansion across data protection, business continuity, networking and security.
What are the chances of a near-term IPO? Here are some anecdotes to help answer that question: Datto raised $75 million in November 2015 at a valuation of more than $1 billion. At the time, the company was cash flow positive. During a June 2017 meeting, ChannelE2E asked CEO Austin McChord if the company (A) needed to raise more money or (B) would pursue an IPO anytime soon. At the time, McChord essentially declined to comment, though he indicated the company remained in growth mode and I believe Datto remains cash flow positive.
My gut says McChord and Datto’s board are carefully putting the pieces in place for a potential IPO in the 2018 timeframe, though I don’t have any firm facts to back that up.
Sources say Weller has actually been around the company for at least a couple of months, perhaps even attending DattoCon 2017 in June. Former CFO Michelle McComb and the company parted ways early this year, ChannelE2E reported in February (item 2 here).
Datto CFO: Big IPO Experience
Earlier, Weller was interim CEO and CFO of Wonga, a London-based financial technology company. Also he was CFO of two publicly held companies — EnerNoc and Akamai. Among his key career experiences: Weller led a team that completed Akamai’s IPO — one of the top-performing offerings of all time — nearly two decades ago. I believe he also worked with Datto board member and investor Paul Sagan, himself an Akamai veteran.
Weller reports directly to McChord, who offered this statement about the company’s new CFO:
“Tim brings a strong track record of financial and business leadership supporting both emerging growth and public technology companies. We’ve built a stellar management team, and we look forward to collaborating with Tim to continue to grow our business by providing value to our managed service provider (MSP) partners, employees and investors.”
Weller has a rare blend of business, finance and technology experience. Early in his career, he was an equity research analyst at Donaldson, Lufkin & Jenrette; as well as a software developer, video game designer, angel investor, and advisor to many technology company CEOs, Datto says.
Datto Expands Its Technology Lineup; Rivals Evolve
In a prepared statement, Weller specifically mentioned Datto’s positioning across data protection, business continuity, networking and security. The somewhat new networking piece is based on organic R&D plus the Open Mesh acquisition earlier this year.
The company also unveiled a unified threat management (UTM) appliance earlier this year, and is looking for additional ways to push deeper into security, sources close to the business say.
Venture capitalist Steve Herrod, a Datto board member, described some key security investment trends to MSSP Alert during DattoCon, though he didn’t specifically mention Datto as a potential buyer in the market.
As part of its expansion plan, Datto this week announced a partnership with Pax8, a next-generation cloud distributor that will support the company’s storage and networking solutions for partners — though Datto will continue to manage the hardware delivery to partners, Pax8 says.
Amid Datto’s moves, the competitive landscape also continues to shift. Rivals Axcient and eFolder merged last week, though McChord downplayed the deal without bashing it. Plus, security veteran Barracuda continues to expand its Intronis MSP Solutions backup offerings, while Carbonite, StorageCraft and several other fast-growing players make their own moves. Carbonite CEO Mohamad Ali explained his company’s strategy in this recent ChannelE2E interview.