Datto plans to raise more than a half-billion dollars through its initial public offering next week, which CEO Tim Weller said the company will use to “champion the MSP ecosystem.”
“This is your time,” Weller wrote to MSPs in a letter that accompanies the filing. “Please know that being a public company will not change Datto’s core. We are excited to expand our investor base and champion the MSP ecosystem. Our MSP-first culture is deeply rooted—in technology innovation through your eyes, in our shared recurring revenue business models designed for you to capture profitable growth and build the value of your business.”
Once a market-leading backup company, Datto expanded to offer PSA tools with the acquisition of Autotask three years ago and now competes alongside IT service management providers ConnectWise, SolarWinds MSP and Kaseya. It boasts 17,000 MSP customers and generated annual recurring revenue of US$507 million as of June 2020.
Based on the valuation range, Datto’s market capitalization will be somewhere between US$3.8 billion and US$4.2 billion when shares are expected to begin trading Oct. 21.
In its S-1 filing, Weller gave investors a bullish outlook, saying the company has grown subscribers 19 percent year over year, and the customers it competes for in the global MSP channel “now manage well over 10 [percent] of the global SMB IT spend, which is US$159 billion and growing.”
“We believe SMBs will adopt technology faster than ever as the world emerges from this pandemic,” he wrote in a letter that accompanied Datto’s filing. “We expect MSPs will help them more than ever. Datto will be there as technology creator, thought leader and support partner as they deploy new applications; navigate technology on-premises, in public clouds and in hybrids of both; and continue to defend against proliferating security threats. Our journey forward is as a leader in an ecosystem comprised of global partners, employees and other vendors that created our success to date. And we invite you to join us.”
Datto was bought by Vista Equity Partners in 2017. Vista Equity Partners merged Autotask with Datto which, at the time, created a company with 1,300 employees and 13,000 customers. Now with 1,600 employees and around 17,000 customers, Datto’s success is owed to complete alignment with MSP channel partners as they digitally transform small to midsize businesses across the country, Weller said.
Once the IPO is launched, Vista Equity Partners will own 72.2 percent of the public shares, according to the filing. Datto is expected to trade under the symbol “MSP.” Weller said Datto exists to help those MSPs digitally transform SMBs around the world.
“Datto’s passion is to serve MSPs in that quest by creating enterprise-grade technology purpose-built for MSPs,” Weller said in a statement. “Our 17,000 partners around the world will not be surprised that we chose ‘MSP’ as our ticker symbol. We eliminate channel conflict by assuring MSPs that we will never compete with them for SMBs—we’re all in on the channel.”