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Datto Acquires Cybersecurity Software Company BitDam

Credit: Datto

Datto has acquired BitDam, a cybersecurity and threat detection company. BitDam's security technology could help MSPs to protect customer applications such as Microsoft 365 and Google Workspace. Financial terms of the deal were not disclosed.

This is M&A deal number 167 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.

Datto is publicly held ($MSP) and backed by private equity firm Vista Equity Partners.

BitDam: Company Background and MSP Security Tools

BitDam's technology protects customers from ransomware, malware, and phishing, Datto says. The threat detection technology was built to stop zero-day threats including those that do not match any known malware signatures, proactively defending against malware and phishing threats within a user’s inbox, chat, or cloud drive, the buyer adds.

In addition to protecting Office 365, G Suite and Microsoft Exchange, BitDam's technology can safeguard cloud drives (OneDrive, Google Drive, Dropbox, Box, etc.) and other collaboration tools (Teams, Zoom) from ransomware, malware, phishing and more, the company says.

Key BitDam company milestones include:

  • 2017: BitDam raised seed funding of $3 million in 2017, according to CrunchBase.
  • 2019: BitDam launched a free email security penetration testing tool, according to MSSP Alert. Organizations can use that tool to perform a controlled assessment that includes a series of file-based cyberattacks. Then, any emails that reach the determined test inbox indicate a cybersecurity point of failure, BitDam said at the time.
  • January 2021: BitDam added an MSP console to its Advanced Threat Protection solution. This console provides MSPs with an overview of all tenants/clients/organizations they oversee and enables fast and easy management, BitDam asserted at the time.

Datto Acquires BitDam: Executive Perspectives

Liron Barak, CEO, BitDam
Liron Barak, CEO, BitDam
Tim Weller, CEO, Datto

In a prepared statement about the deal, Datto CEO Tim Weller said:

“Cyber resilience has been at Datto’s core since the launch of our flagship Continuity service and the Datto Cloud over a decade ago. This acquisition marks an important step on our security journey, coming on the heels of our recent launch of Ransomware Detection in Datto RMM. Both deliver new revenue and margin opportunities to our 17,000 MSP partners just as cyber attacks on SMBs are proliferating. We welcome the elite BitDam security team to Datto as we continue to execute on an ambitious security roadmap for our partners.”

Added Liron Barak, BitDam’s co-founder and CEO:

“We are thrilled to be joining the Datto team to help shape the security roadmap for MSPs as threats evolve globally. Thanks to the talented BitDam team, whose excellence in cybersecurity technology innovation has led our journey here, our patented technologies can help protect cloud-based remote workforces from unknown cyber threats at an even greater scale through Datto.”

MSP Technology Companies and Cybersecurity

Multiple technology companies that support MSPs have been acquiring cybersecurity companies and/or building out cyber expertise. For instance:

  • Acronis has acquired multiple cybersecurity companies as part of a push beyond data protection toward cyber protection.
  • ConnectWise recently acquired Perch and StratoZen for SOC (security operations center) and SIEM (security information and event management) services.
  • Kaseya acquired RocketCyber for SOC as a Service (SOCaaS), and ID Agent for dark web monitoring.
  • NinjaRMM is hiring red team cyber experts to further lock down its MSP software.
  • OpenText acquired Carbonite and Webroot to provide MSPs and their SMB customers with complete cyber resilience technologies.
  • SolarWinds MSP (rebranding as N-able) has a deep OEM relationship with SentinelOne for endpoint protection.

Meanwhile, MSP-friendly companies such as Barracuda and Sophos have been developing cyber tools specifically for MSPs for more than five years.

Datto: Back In Acquisition Mode

This is Datto's second small, tuck-in acquisition in recent months. The other deal involved Gluh -- which is now the foundation for Datto Commerce, a cloud-based sales platform. Datto Commerce provides MSPs with sales quoting, procurement and e-commerce capabilities, and connects to third-party distributors such as Ingram Micro and Synnex.

Datto is expected to announce Q4 2020 earnings results on Thursday, March 11, 2021.

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.