The number of SMB customers managed by MSPs using N-able’s remote monitoring and management tools has gone from 20,000 to 52,000 over the last two years. And CEO Gavin Garbutt says that growth is going to explode on the heels of a multi-million dollar investment in the Ottawa-based company from Menlo Park, Calif.-based Accel-KKR’s structured capital fund.
“We’ve been able to achieve 175 per cent growth in the number of customers our MSPs manage,” Garbutt said. “Now we’re going to add a rocket to that and help them really expand.”
Details of the investment were not disclosed, but Garbutt did provide some context on how the deal came to be, how the money will be used, and where N-able goes from here.
Where’s the money going?
Faced with questions about what colour the new N-able corporate jet would be, Garbutt instead said that the incoming capital is “all going into our strategic plan,” which means putting the pedal to the metal on its bid to make sure its MSPs are covering 100 per cent of their client’s manageable devices. It’s a campaign that’s been ongoing since the beginning of 2010, and it’s one that Garbutt sees picking up as the new money comes it at the same time that managed services enter the “early majority” phase of interest and awareness in the SMB market.
“We’re at an ‘add water and grow’ phase for ourselves and our MSP partners,” Garbutt said. “We’ve got a fantastic channel and the exact right solution. We’ve proven it over the last year and a half. Now it’s time to put it on steroids.”
Some areas of focus for the additional money:
- Support for existing MSPs: Garbutt suggested N-able would use the funds to continue to build out more products that MSPs can offer their customers as services.
- Help for new MSPs: The company will expand its efforts with developing managed service providers, helping them continue their journey from product resale to ongoing revenues.
- More business focus: As part of the deal, Accel-KKR will get two seats on N-able’s eight-person board. Garbutt said that with its partnership with the equity firm, it expects to ramp up the amount of and quality of business best practices it can offer partners.
- International expansion: Currently, 40 per cent of N-able’s business comes from outside of North America, and N-able has offices in the UK, the Netherlands and Australia. Garbutt said there are two more new markets about to opened up and the company plans to “continue to double up” on international markets this year and beyond.
Garbutt seemed reticent to provide too many specifics on how the investment will go towards building momentum for the company’s partners for fear of stealing his own thunder.
The company holds its annual Partner Summit next week in Arizona, and expects some 450 North American MSPs in attendance. Garbutt said there will be a lot of follow-up at the event about how the company plans to use its new capital to help partners expand their managed services practice.
ChannelBuzz.ca will be on site at the event, and we’ll bring you a deeper look at how N-able’s taking advantage of its newfound wealth next week.
How’d we get here?
In his typical personal style, Garbutt says that N-able didn’t have a shortage of options when it comes to investments (“When you’ve got a pot of honey, you tend to attract some bees.”) but considered a number of options, including going public, a variety of private equity offerings, or “continuing along our merry way.” But the Accel-KKR offering proved just right, and provided N-able with “not just an investor, but a partner,” Garbutt said.
“We really like the people and they were extremely interested in the three-year strategic plan we presented,” he added.
While this investment, along with its existing growth forecast, provides room for ample growth, Garbutt said that going public eventually is “definitely still our Plan A,” particularly as the ideas of remote management and managed services continue to gain traction.
“Our area is managed services in the small and medium-sized business market, and the definition of managed services has already expanded so greatly,” Garbutt said. “There’s no endgame here. MSPs’ businesses continue to evolve, and we haven’t even scratched the surface of this market opportunity.”
A growing trend?
If SMBs are catching onto managed services, could it be that smart venture capitalists are as well? Earlier this week, Summit Partners announced it had acquired a significant stake in the newly spun-off RMM business of Zenith Infotech, appropriately named Zenith RMM.