Venture Capitalists Bet $38M on Aspiring MSP Disruptor Called Electric
The MSP (managed services provider) market is filled with mergers, acquisitions and private equity funding deals. However, venture capital deals involving MSPs are typically rare, since VCs crave intellectual property and exponential growth opportunities.
Still, some MSPs are attracting venture capital dollars. A case in point: Electric, a real-time IT support solutions provider, recently raised $25 million in Series B funding. GGV Capital led the round with help from existing investor Bessemer Venture Partners. Electric’s total funding to date is $38 million, the company says.
At first glance, Electric sounds like any other small business-focused MSP — including some lofty, chest-pounding company claims. The company description is rather simple:
“We assess, deploy and manage your technology at a fraction of the cost and headaches normally experienced with traditional IT managed service providers.”
Electric: A Truly Automated MSP?
So what’s different here? Electric, founded in 2016, offers human-assisted, AI (artificial intelligence) chat support service for SMBs. Those bots can handle mundane support requests like setting up an email address and plenty more, founder Ryan Denehy explained to Crunchbase News during Electric’s Series A funding round.
Denehy previously worked for Groupon and co-founded SWARM Mobile, which built retail analytics software and connected devices for SMBs.
His progress so far with Electric sounds impressive. The company now has 90 employees serving 300 customers — and those customers have more than 10,000 employee end users.
Among those taking note: Invarosoft, which is calling on MSPs to carefully study Electric’s business and then fight back through heavy automation.
Electric: New Hires, More MSP Automation
Still, Electric isn’t resting on its laurels. The company’s recent hires include COO Rani Yadav and VP of Sales David Weiner. Yadav previously was VP of marketing for Blue Apron. Weiner joins from real estate technology startup Compass, where he helped grow the sales team from six to more than 85 workers across 18 markets.
Backed by the new funding, Electric will invest more in automated IT troubleshooting, systems administration, and data-driven recommendations for some of the most widely used office technologies and SaaS applications in the world. Electric will also invest heavily in its Client Success, Sales and Marketing, Operations, and Executive teams, the firm said.
Reflecting on the funding, Denehy said:
“This past year has brought exponential growth for Electric and I’m proud to call us the fastest-growing company in our competitive set. Our sales, product and engineering and account management teams have scaled up to support a wide range of customers and, most importantly, make those customers happy. With the new funding, we’re excited to continue on this rapid growth trajectory and become the de-facto IT solution for small and midsize offices all over the country.”
Key Electric Technology Partners: It won’t be a solo journey. Electric’s key technology partners include Slack, Jamf, Kaseya, Ubiquiti, Cisco Meraki and Squarefoot. That makes us wonder: How much of Electric’s technology is home-grown, and how much of it can rival MSPs simply emulate on their own? We’re checking.
Fast Growth, But What About Profits?
No doubt, Electric is growing fast. But the privately held company doesn’t disclose revenue or income figures. And as a venture-backed company, it’s a safe bet Electric is favoring growth over profits right now — though that’s just our hunch.
The big question: Can the self-proclaimed next-generation support provider truly build out its own intellectual property, scale fast, generate profits — and steamroll traditional MSPs along the way? We’ll be watching.
Additional reporting by Joe Panettieri.