The funding and the acquisition both involve equity firm Great Hill Partners, but Auvik is stressing that while this will allow Auvik to solve a broader range of customer problems, and could lead to select acquisitions, they aren’t about to start buying up companies like chocolates.
Marc Morin, Auvik Networks’ CEO
Waterloo-based network management software provider Auvik has announced that they have received a US$250 million investment from private equity firm Great Hill Partners. Auvik also indicated that Great Hill Partners has purchased a majority stake in Auvik with the money.
The acquisition is the equivalent of an E round, said Marc Morin, Auvik Networks’ CEO.
“At this level, there’s always a mix of primary and secondary investors, and we’ve had some of our VCs for 8 years,” Morin indicated. “This removes some of our existing investors off the table, and replaces them with a bigger investor with a bigger bag of money, which will allow us to be more aggressive.”
So what will being owned by a VC mean for Auvik. Not a great deal, Morin noted.
“The bulk of it going forward will be business as usual – although it will perhaps accelerate our mandate and our mission,” Morin said. “It wont change who we are, or what we look like. We have done one acquisition [Spanish network traffic analytics technology provider Talaia in 2018] and will likely do more, but we won’t be one of those that acquire one company a week. We will stay true to our focus.”
Morin said that Auvik will use acquisitions as a supplement to their core strategy, not to make major moves, even with the deep pockets now in place.
“We view acquisitions as a supporting tool,” he indicated. “Our strategy is to be a dominant player in OfficeOps. We will use acquisitions as an accelerant, to get something faster than we could build it ourselves. We could also use acquisitions to build up our geographic expansion. We know that there are a lot of different strategies around acquisitions, but Auvik offers a cohesive product offering. Our customers have been asking us to do more, so we will broaden that out. But it will be within the context of that same mandate.”
Morin explained these requests from customers to, as he put it, zoom out.
“We have been focused on deploying our networking tools in the MSP space as well as the corporate IT space,” he indicated, while noting that MSPs still made up the large part of their business. “There are still plenty of networks in front of us. We manage 50,000 networks now, and there are 10 million networks. So there is a huge opportunity just in that narrow mandate. But customers want us to build more than just that network. They want us to solve their big infrastructure problems. When something goes wrong, the customer wants to be able to know is it the network? Is it the home network? The ISP? The SaaS application? We’ve been so narrowly focused on the network environment, but they want us to zoom out beyond that.”
The $250 will be used in part to fund new product development to do this zooming out, as well as looking to expand in the midmarket.
“We don’t target SMBs directly,” Morin said. “They should buy through MSPs. But the midmarket is owned by a split responsibility between IT working for end users and IT pros working for MSPs.”
Geographic expansion is another objective for the new money.
“We have been heavily focused on North America so far,” Morin said. “We do have a presence in EMEA, but there are huge opportunities to accelerate there. Proper investments are required in order to properly serve companies in different time zones.”
Auvik, formerly a trade show regular in the pre-COVID days, is expecting to make their return at DattoCon in October – although it’s still likely that their booth will be staffed by US-based staffers.
