Datto earmarks $75m war chest for partners and products

Backup vendor promises more leads, more datacentres and more resources for partners following Series B funding success

Partners will be the first to benefit from Datto's $75m (£49m) funding injection, the backup and disaster recovery vendor has claimed.

Resellers in the EMEA region are to benefit from new lead generation resources, a new "partner briefing centre" and two new datacentres in Germany and Iceland following the Series B investment announced this morning, EMEA managing director Andrew Stuart told CRN.

Founded in 2007 by its then 21-year-old CEO Austin McChord (pictured), Connecticut-based Datto claims to be profitable, meaning none of the cash will be swallowed up by the need to fund operations.

Stuart indicated the $75m lolly, which brings Datto's total investment to $100m, will be ploughed into a mix of geographic expansion in EMEA and Asia-Pac and product innovation.

UK partners will from Q1 2016 be able to offer customers a "second level of protection" from a new Icelandic datacentre, Stuart indicated. Another datacentre in Germany, which it was already planning, will go ahead in Q4.

"Because we are a hybrid solution, partners deploy our appliances on-site and then it replicates out to our [UK] datacentre," said Stuart. "I can't imagine anything ever going wrong in our UK datacentre but this just gives [partners] that second level of protection that we are, firstly, taking a copy from on-site to an external datacentre but then further replicating it into a new geographic location."

He added: "We're bringing that additional level of redundancy but we're not increasing any of our costs to partners – we are effectively just adding additional value to the solution we already have."

Datto has just committed to relocating to another building in Reading's Green Park that will triple the floor space. It will house a new "partner briefing centre" where reseller and MSP partners can interact with its technology.

The vendor unveiled its first routing appliance earlier this year and Stuart indicated some of the money will be used to help it expand further beyond its roots in backup towards providing "total data protection". Datto claims it grew sales 57 per cent year on year in its Q2.

Datto has close to 1,000 EMEA MSP and reseller partners, with the goal being to ensure they can trade profitably in its solutions, in line with its wider corporate mantra, according to Stewart.

"It has become the norm that tech companies grow at an exponential rate but don't actually make any money," he said. "We are slightly different in that we always ensure we are providing profitable solutions for partners, and that's embedded in our own DNA. We have built a stable business so our resellers can do the same."

In a statement, McChord claimed it is a "great day" for Datto's MSPs.

"As a profitable company, Datto isn't raising capital to fund operations, but instead, to enter new markets and build new products and technology," McChord said. "With this new investment, Datto is excited to be pushing ahead to build new technology and improve the experience for our MSPs and end users around the world."

Paul Tomlinson, managing director of Datto UK MSP partner Mirus IT, said his firm has about 50 per cent penetration with Datto across its current customer base but is targeting 100 per cent.

"We love the product, and the money that we're going to see come in will only help Datto buy other companies that will help us sell the product."

Tomlinson also welcomed the prospect of the secondary Icelandic datacentre.

"There was a survey sent out to partners recently, asking their opinion on whether they should have one, as it's always been recognised as one of those nice-to-haves," he said. "People look at the solution and ask 'what's the disaster recovery for Datto' and the Icelandic datacentre will help with those more complex sales."

Colin Blumenthal, managing director of Datto partner Complete IT, said: "This further investment in all areas of the business gives us confidence we will be able to provide more Datto solutions to an ever-wider audience."