Cloud marketplace provider Pax8 has raised $96 million in equity capital to expand the company's geographic reach while also doubling down on cloud automation and orchestration capabilities for its marketplace users. Catalyst Investors and Sageview Capital led the Pax8 funding round, with participation from existing investors Blue Cloud Ventures and Liberty Global Ventures. Pax8's overall company valuation was not disclosed.
The funding news surfaces one day after Pax8 announced the Wirehive acquisition, which provides a UK footprint and Microsoft Azure cloud partner capabilities. Wirehive also offers managed cloud services for Amazon Web Services and Google Cloud.
Similar to Amazon’s long-term Everything Store strategy for consumers, Pax8 has focused on building an expansive online marketplace that allows IT professionals to buy cloud products -- including SaaS applications for security, storage, IT management and more. Pax8 has a channel-obsessed executive team that builds and promotes the cloud marketplace for MSPs (managed IT services providers) and channel partners. Still, Pax8 also appears to be broadening its focus a bit by promoting the service to "IT professionals" in some recent communications.
Pax8 Funding: Executive and Investor Perspectives
In a prepared statement about the funding round, Pax8 CEO John Street said:
“This new investment provides Pax8 with the capital to expand globally into new geographies and accelerate the ongoing development of our industry-leading cloud marketplace technology platform. We have a unique approach that tightly couples our technology platform with an unparalleled customer experience that simplifies cloud adoption. As we enter into the new year, we are excited about the partnership with Catalyst and Sageview and the new opportunities this investment provides.”
Added Todd Clapp, partner at Catalyst Investors:
“John and his team have built Pax8 into a true innovator and leading provider of cloud services to the channel. As SMBs have only moved a fraction of workloads to the cloud, Pax8 is poised to experience tremendous growth and Catalyst is thrilled to be partnering with the team to help unlock this value.”
Concluded Scott Stuart, co-founder and managing partner at Sageview:
“Pax8’s impressive growth profile, significant addressable market, and emerging leadership position in North America and now Europe are hallmarks of a Sageview investment. We look forward to partnering with the Pax8 team and our co-investors to capitalize on the opportunity.”
Clapp and Stuart both join the Pax8 board of directors.
Private Equity, Venture Capital and MSP Software Supply Chains
Meanwhile, private equity firms have been closely watching the cloud distribution and cloud solutions provider (CSP) markets. During much of Q4 2020, multiple private equity firms performed due diligence and research on the market, according to multiple ChannelE2E background conversations.
Numerous CSPs, distributors and upstarts — names like AppSmart, D&H Distributing, Ingram Micro Cloud and Sherweb — already compete in the cloud marketplace industry. Moreover, ConnectWise continues to build out a Marketplace, and Datto in 2020 acquired Gluh, a startup provider of sales quoting, procurement and B2B supply chain software for MSPs.
Still, Pax8 has considerable momentum within the crowded market, and a "pure play" cloud marketplace focus has apparently served the business well. Revenue and profit figures are undisclosed. But the company has surfaced multiple times on the annual Inc. 5000 list of fastest-growing, privately held U.S. businesses.