Deadpool No More: After Planning To Shut Down, Verelo Is Acquired By Enterprise DNS Company Dyn

Dyn, the New Hampshire-based Internet infrastructure-as-a-service company that provides DNS and email services, has acquired Verelo, the Toronto-based website monitoring startup.

It’s really big news for Verelo and its users, since in mid-December, Verelo announced that it would be shutting down just six months after launch and returning its remaining funding to investors. At the time, Verelo’s co-founder and CEO Andrew McGrath said that the startup, which provided website uptime and performance analytics as well as malware detection and site health monitoring services, just didn’t have enough traction and funding to take it to the next level independently. “It’s clear that we’re still playing a big game of catch up and have not got the financial backing required to truly fulfill our one big goal of making the Internet a better place,” McGrath wrote in an email to users.

But in the days following, the people at Dyn approached Verelo with an acquisition offer, and the Verelo folks accepted. McGrath told me, “This is an excellent outcome for our investors and sees our service continue, which are personally my two highest priorities.”

In the long term, Dyn does not plan to sell Verelo’s services — they’ll be offered as a free service to existing customers and a sales tool for prospective ones.

Financial terms of the deal aren’t being disclosed, but I’m hearing that it is providing a nice return to Verelo’s initial investors. In October 2012, Dyn closed on $38 million in Series A funding led by North Bridge Capital.

In a press release announcing the deal that will be issued this morning, Dyn CEO Jeremy Hitchcock explained his interest in Verelo thusly: “Our mantra is ‘Uptime is the Bottom line’ so we are always looking for great opportunities to prevent downtime. Acquiring Verelo allows us to offer more innovative services to our customers.”

It’s great news that will certainly be well-received by the group of dedicated users Verelo attracted in the months since its initial launch who were bummed to hear of the shut-down plans.

As for the Verelo team, many of them will be moving on to new things; I understand that only one or two Verelo staffers are considering joining Dyn as part of the deal. And founder McGrath himself is planning to start a new startup — and he’s planning to use his proceeds from the Dyn deal to fuel the new venture.