Axcient, eFolder Merge for Cloud Backup, DRaaS Push
Axcient and eFolder are merging to combine their cloud backup, disaster recovery (BDR), business continuity and DRaaS solutions. eFolder CEO Matt Nachtrab is CEO of the combined company; eFolder CTO Kevin Hoffman maintains his position; and Axcient CEO Justin Moore shifts to chief strategy officer, the companies say.
Financial terms were not disclosed. The deal comes only a week after Nachtrab shifted to the CEO role at eFolder.
Related Interview: eFolder CEO Matt Nachtrab explains the merger.
Axcient was a well-funded, early mover in the BDR market. But by February 2015 the company was back in the market raising more money — $25 million in Series E funding at the time. The company had a blended direct and indirect sales model, which sometimes irked some partners. Nimble, pure channel upstarts like Datto eventually grabbed considerable market share and mind share in the SBM sector.
Amid that reality, Axcient eventually shifted much of its focus to the midmarket. Rumors about Axcient being up for sale have circulated since early to mid 2016. In December 2015, we predicted the company would reach a market inflection point and would pursue a change of ownership or some type of financing shakeup.
Matt Nachtrab’s Opportunity, Challenge
Now, it’s up to Nachtrab to blend the Axcient and eFolder product lines while also sorting out the sales strategy. Nachtrab, formerly of ConnectWise and LabTech, is a pure channel guy. eFolder also is a pure channel model. So it’s safe to expect Axcient’s assets and resources to head in that direction.
According to an Axcient and eFolder statement:
“By bringing together the strengths of both Axcient and eFolder, the combined company will be able to service the full spectrum of businesses – from SMB to mid-market – with a broader set of solutions designed to maximize IT availability and employee productivity.”
That mindset sounds similar to moves at Carbonite, in particular, which has leveraged M&A and R&D to extend across consumer, SMB and midmarket data protection solutions.
Axcient, eFolder Merger: Highlights
Among the eFolder-Axcient deal highlights:
- The combined business will continue operations in Denver, CO; Mountain View, CA; Austin, TX; and Smolensk, Russia with over 100 team members in R&D;
- Together, the companies have 50,000 customers and 400,000 endpoints under management. On a related note, we’re checking to see how Axcient’s existing direct sales accounts will now be managed.
- The combined company will have close to 4,000 MSPs. eFolder had 3,000 channel partners as of last week, so I suspect that means the bulk of the combined company’s partner base comes from the eFolder camp.
BDR Market Shakeout
By the way, it’s safe to expect several more BDR-related M&A deals. The market remains far too fragmented with too many vendors, particularly in the SMB sector. Recent buyers have included Carbonite and Arcserve — both of which acquired technology assets at deep discounts in recent months, we believe. We’ll share more thoughts soon.