'I feel like we're only just getting started' - Distology lands private equity backing

Investment will be put towards breaking into new countries through M&A and expanding leadership team, CEO and founder Hayley Roberts tells CRN

Cybersecurity VAD Distology has landed investment from private equity firm NorthEdge as it plans to step up international expansion, make acquisitions and expand its senior management team.

NorthEdge is a mid-market private equity firm based in Manchester. It claims to manage more than £900m in private equity funds and typically invests between £2m and £45m in each business it backs.

Founded in 2014 and also based in Greater Manchester, Distology has been self-funded by CEO and founder Hayley Roberts and another shareholder over the last six years.

In addition to financial backing, NorthEdge will also provide additional resources to help Distology realise its three-year growth strategy which will include growing its presence in Europe and building out its services capabilities.

The deal with NorthEdge was signed on Friday, Roberts said. NorthEdge's director, Liam May, will join Distology's board while Andy McEwan will join as chair.

"We have a really solid three-year plan. I'm genuinely so excited for the future; I feel like I'm only just getting started," Roberts told CRN.

"We've worked really hard over the last six years growing a team and it's very much been like my child to me. So it has been really nice to have somebody now to lean on and help with that growth, and who gets our vision."

Roberts said Distology is already eyeing an acquisition in Germany as its first expansion move following the investment.

The CEO also said suggested that an expansion into the US market could also be on the cards over the next three years.

Closer to home, Distology will also look to expand its presence in the UK to help its customers in the south of England, and also plans to expand its Dutch business to at least a team of five over the next year.

Roberts said that Distology will also be announcing some new senior hires over the coming months, including a chief product officer set to start in June.

Meanwhile, growing out its services business - either organically or through acquisitions - will be a key priority for Roberts over the next three years.

The goal is to become Europe's leading value-added distriutor of cloud-based security software, according to Roberts.

"Distribution can be seen as a necessary evil in some vendor and partner views. I'm on a one-woman and one-company mission to try and change that; to change the perception of what distribution can really achieve and really spin it on its head. And that's what Distology represents," said Roberts.

Distology claims it has grown its revenues by more than 75 per cent over the past three years. But, for Roberts, maintaining that pace of revenue growth over the next three years is not a priority.

"I don't really care about revenue because that's just vanity, but I ultimately want to continue the growth in our net profit," she said.

"But I'm not going to sacrifice anything in order to do that. We're not going to be cutting our costs just to hit our net figures. Instead we want to make sure we're adding value based on success and that's why we're hitting our growth goals. It's about continued growth and not just revenue growth; in every capacity we're growing over 50 per cent year on year, and I intend to keep it around that mark."

Distribution has entered a golden age of private equity evaluations over the last few years. Ingram Micro was sold for an eye watering $7.2bn in December while rival Tech Data similarly attracted a $5.4bn investment from Apollo Global Management.

Once considered the lowly middle-men in the IT supply chain, distributors are now seen as lucrative business opportunities for investors, according to Roberts.

"It's a good indication of how distribution is going to be seen in the future There's a huge amount of growth and expectation now from a proper VAD, so I'm thrilled that's happening across the board in distribution and I'm just pleased to be part of it," she said.

"Private equity are learning to spread their wings in terms of who they invest in. I think anything to do with technology is going to be worth an investment - especially if it's got annual recurring revenue, a really good story to tell and ultimately is on a growth path."

Despite distributors becoming hot property for investors, Roberts said that Distology's valuation over the next few years will have little importance in her grand plans for the distributor.

"I don't care how much this is worth in a few years; I feel like I have so much more to do and so much more value to create and I genuinely think we can do it at Distology," she said.