Datto, the company that acts as a backup and disaster recovery service for small to medium sized businesses (SMBs), announced today that it has raised $75 million in a Series B investment.
The round was led by Technology Crossover Ventures (TCV) and brings the total investment across two rounds for the eight-year old company to just over $100 million.
Ted Coons, a general partner at TCV said the firm was attracted to Datto because it had strong leadership with a well-defined product in a huge potential market space.
“On a worldwide basis there are about 5 million [SMBs] — businesses of substance — they’ve got 50,000 endpoints/customers. There’s a lot of room to build,” he said.
Datto helps SMBs get back up and running quickly in the event of a weather event like a hurricane (or any disaster) that could wipe out the offices, computers and on-site servers of a small business. Even companies using cloud services very likely have some on-premises servers and the service is designed to ensure business continuity when a disaster hits.
Last year Datto also bought Backupify, a cloud-to-cloud backup tool giving it another level of safety for SMBs.
Even though they didn’t necessarily need the money, CEO Austin McChord saw an opportunity to get some additional capital on favorable terms and he took it.
“We are profitable, but it’s nice to have [additional] cash to continue geographic expansion, develop new [products] or make a strategic purchase,” CEO Austin McChord told TechCrunch.
The company sells primarily through the channel using Managed Service Providers, organizations which help SMBs run their IT function. McChord reports Datto currently has 550 employees and in the neighborhood of 50,000 customers, 85 percent of which are in the US.
Part of his long-term plan is to expand further into worldwide markets, and to that end, the company already has an office in the UK staffed with 50 people to help establish a market in Europe. It also has a newly minted office in Australia to help make a push there and into Asia.
The company also wants to use some of the money to expand the product line and it already has an internet-enabled networking product coming out soon. The product, as with the backup and recovery service is aimed at SMBs and designed to allow MSPs to communicate with the network device even when there is no internet connection on-site, something that would be very useful in a disaster situation. Instead of rolling a truck and having a service worker check on the scene, they have options to communicate with the network before they have to do that.
McChord also hinted at a future product that could help customers make use of the 160 petabytes of data under the company’s purview that is just sitting there unused unless disaster strikes. He wouldn’t say how he would use it — it wasn’t clear that he even has a specific product in mind just yet — but the company is clearly thinking about how it could help its customers make better use of all of that information, while expanding the product line beyond pure disaster recovery.
By this time next year, the company, which has its headquarter in Norwalk, Connecticut could have close to 700 employees as part of its expansion plans.