Summary List Placement
2020 was the year that almost all business moved online — and 2021 could be the year that web service companies cash out.
That appears to be the case for Kaseya, an IT and cloud security services provider valued at $2 billion at the start of 2020 that caters primarily to small businesses and managed service providers. Kaseya blew past its own expectations last year, CEO Fred Voccola told Insider, as thousands of businesses looked to beef up their online offerings to survive COVID-19 shutdowns that closed in-person operations. And he believes that the fallout from the massive SolarWinds hack could position the business to grow even further.
“We got lucky, for lack of a better word, and we positioned ourselves pretty well over the last five years,” Voccola told Insider. “And it paid off.”
The Miami-based company is on track to take in roughly $330 million in revenue in fiscal year 2021 — a 25% increase over the previous year — and will make $120 million in earnings before interest, taxes, depreciation, and amortization, according to Voccola.
Now, Kaseya is eyeing an initial public offering in 2021. If successful, it could be the latest in a string of web services firms to go public on the heels of pandemic-fueled success, including Snowflake, Datto, and Qualtrics.
The IPO will likely be in the fourth quarter of 2021, according to Voccola, who it expects it to be valued at between $4.5 billion and $6 billion at that point. Kaseya is currently owned by the private equity firms Insight Venture Partners and TPG Capital, which most recently infused it with $500 million in May 2019.
Voccola said that pandemic jolted small businesses awake to the fact that they needed web services and data security in order to function without in-person operations. Sales at physical stores dropped roughly 14% amid the pandemic, according to eMarketer, which estimates that it could take up to five years for in-person commerce to recover.
“[COVID] really put a steroid in our acceleration because now technology is what small business and mid-sized businesses need just to survive,” Voccola said. “If you’re a doctor’s office and you’re not doing telemedicine, you’re not going to make your living just on emergencies.”
The unexpected growth has enabled the company to expand rapidly in the past year. The company hired over 200 new employees in 2020 despite originally planning to only hire a handful, Voccola said. Kaseya also poured $10.5 million into Kaseya Cares, an emergency response program meant to provide accounting guidance and free or reduced services to clients that are struggling financially.
Voccola is confident that Kaseya’s growth will continue even as COVID-related restrictions on businesses lift in the coming months. One factor is the massive SolarWinds hack that compromised major businesses and the highest levels of US government.
While SolarWinds is a Kaseya competitor, Voccola stopped short of criticizing the company: “I’m not going to say they suck because of this.” Rather, headlines about the …read more
Source:: Business Insider