The $10 Series A funding round will be used to significantly expand the company’s staff, while the new service, due by the end of the month, is their Billable automated billing reconciliation solution.
Gradient MSP emerged from stealth a year ago, and introduced their first product, a free data hygiene product designed specifically for MSPs, last June. Today, they are announcing a $10 million dollar plus funding round designed to significantly increase their staffing and their global expansion. They have also indicated that their next product, their Billable automated billing reconciliation service, will be available by the end of this month.
Gradient MSP is the brainchild of Colin Knox, who created Passportal to provide password protection services to MSPs before selling it to SolarWinds in 2019. Gradient MSP is based on Knox’s experience with both Passportal and SolarWinds, looking to create a new platform of services to address MSP pain points while also providing real time, accurate insights to IT channel vendors as well as MSPs.
Knox said that the data hygiene offering has gotten an extremely strong response since it was released.
“We saw some really awesome quick traction with the data cleaning tool, which frankly surprised us a bit,” Knox said. “We expected some interest, but this kind of tool hadn’t been used in the MSP industry before, so we didn’t know how it would resonate. We started to realize this bigger opportunity of how we could work them and tied it to conversations with channel vendors, who requested that we enrich the data in their PSAs.”
Knox said that the Billable automated billing reconciliation solution was a logical next step because it addressed pain points for both MSPs and channel vendors.
“We had already had this idea of doing billing reconciliation for MSPs,” he indicated. “We had more conversations with channel vendors, and the top request consistently was to reconcile billing to the PSAs, so that channel vendors integrated to Gradient would have this pass through Gradient to the MSP’s PSA of choice.”
The forthcoming Billable solution, which unlike the data hygiene solution is a paid service, will allow MSPs to get pad for everything they do.
“MSPs have focused on automation, but not on the business side of automation,” Knox stated. “As part of a full business and automation platform, Billable will integrate seamlessly with any other tool in the MSP’s stack, most notably their PSA.”
Knox said that no one else in the MSP-focused space does exactly what they do with Billable. He noted that startups in Belgium and Australia have moved into the space, that ConnectWise did a small utility in July, and that other players in the space aren’t as granular as Billable.
“We’ve taken a different approach, to simplify the experience, to make it more effective as a process,” he noted. “Jay McBain at Forrester says that 10,000 vendors go into the IT channel and 17,000 SaaS businesses are now planning channel programs today. Manually reconciling even a thousand different tools is insane. So the goal is to automate and empower MSPs with business automation so they aren’t leaking dollars, and accelerating ease to market for any channel vendor with integrations with Gradient.”
The $10M in Series A funding investment is led by Anthos Capital with participation from StoneMill Ventures, Gula Tech Adventures and Accelerate Fund. It is Gradient MSP’s first formal funding round.
“We did a small strategic seed round in the May-June time frame,” Knox said. “We weren’t looking for money, but there was an opportunity to bring some strategic investors on. This round was going to be a formal seed round, but it grew in size, so we called it the Series A round. Two of this round’s investors were in the earlier round in the spring.
The company plans to use thew new funding to hire 30 new team members in the next three months and another twenty by the end of Q1 2022, bringing the company to a 60+ full-time, fully remote workforce
“Some of these are in R&D, some of them are in marketing, and a lot are in both partner success and a lot in community engagement,” said Dave Goldie, Gradient MSP’s VP of Channel. “I joined Gradient MSP because it is an investment in the channel. We will be investing in traditional events and activities like booths and shows, but we will also be engaging in the channel community, and engaging in the industry’s sub-communities, and engaging in the digital world. We don’t see ourselves as a channel vendor but as a channel champion, providing an amazing experience for the channel as a whole, and to foster the success of the industry as a whole.”