AppRiver CEO Seeks Tuck-In Acquisitions for MSP Partner Platform Expansion
Backed by fresh private equity funding, AppRiver is now a business platform for MSPs, and the company is seeking tuck-in acquisitions to extend that platform worldwide, CEO Michael Murdoch tells ChannelE2E.
Until about a week ago, AppRiver had self-funded its growth for more than 15 years. And yes, the company has grown every year since inception. But now it’s time to shift the business into high-gear. How? It involves an ‘AppRiver 2.0’ mindset, a new AppRiver platform called Nautical, and private equity funding from Marlin Equity Partners, Murdoch says.
In some ways, AppRiver competes with massive Microsoft distribution partners like Ingram Micro Cloud, Synnex CloudSolv and Tech Data StreamOne — which transition VARs and MSPs to Office 365-centric services. In other ways, the company competes with venture-backed upstarts that move companies to SaaS-centric cybersecurity and email protection models.
AppRiver is well-known for MSP-centric, white glove-type “Phenomenal Care” services. But some new wrinkles — including that private equity funding plus a platform called AppRiver Nautical — have arrived. Nautical is a Web-based tool that automates the MSP invoicing and payment process, and plenty more.
Inflection Point: Finding Funding
Investors have knocked on AppRiver’s door for several years but the company never took any funding until now. The company has grown organically for 15 consecutive years and has been growing this year as well. Most of that growth comes from channel partners. Indeed, MSPs and SMB-centric partners fuel about 70 to 75 percent of the company’s revenues.
Still, the hunt for a potential funding partner started about a year ago. At the time, the Nautical strategy was coming together and “we thought it was time to further accelerate our growth,” Murdoch says.
AppRiver attracted interest from multiple would-be investors. But Marlin Equity Partners stood out because of the company’s operational experience and alignment with AppRiver’s “Phenomenal Care” customer support mantra.
Looking Ahead: Tuck-In Acquisitions, International Expansion
AppRiver has customers and partners in 69 countries, but Marlin Equity is looking to “take us to every corner of the planet,” Murdoch says. That includes expanding an existing EMEA business, while also studying potential expansion moves into the Asia Pacific area. The company will remain 100 percent committed to its channel-centric model, he adds, while exploring potential tuck-in acquisitions.
The strategy won’t be easy. Just about every MSP-friendly technology company with a war chest is in the market exploring acquisitions. Kaseya, for one, is expected to announce two or three deals in the next few weeks, CEO Fred Voccola recently told ChannelE2E.
What about moving beyond MSPs to potentially engage distributors and other types of partners? While AppRiver will potentially explore new types of relationships, the company wants to “dance with the one that brought us” into so many customer engagements. That’s another way of saying AppRiver will remain loyal to MSPs — while minimizing or avoiding any potential risks of channel conflict.
Overall, the private equity funding coupled with the Nautical platform provide a career path for both AppRiver and its 260 employees, Murdoch says. “We competing with some of the biggest companies on the planet,” he adds. “And we’re continuing to do it as a standalone company.” But going forward, it’s with Marlin Equity Partners’ backing.