Infinigate CEO takes aim at APAC and fresh M&A after brand revamp

“The business model in APAC is closer to what we do in EMEA, so APAC for us seems like the next step,” Klaus Schlichtherle tells CRN

APAC, rather than the US, is the likely next stop in Infinigate's global expansion drive, CEO Klaus Schlichtherle has revealed as the cybersecurity distributor performed a brand revamp.

The Switzerland-based VAD last night unveiled a new logo and strapline designed to encompass the identities of Nuvias and three other transformative 2022 acquisitions.

The M&A spree saw Infinigate's revenue swell from €800m to €2.2bn, putting it closer in scale to the only other independent VAD that covers EMEA in the form of Exclusive Networks (which logged 2022 gross sales of €4.5bn).

Eager for APAC

Infinigate is counting on combining further M&A in EMEA and continued annual organic growth of around 20 per cent to propel revenues to €5bn by 2027.

But talking to CRN, Schlichtherle revealed that the private equity-backed distributor - which currently operates in 30 countries in EMEA - is also looking further afield in its growth quest.

"If there are any opportunities which are good for our overall global footprint, we would go outside of EMEA," he confirmed.

Infinigate is unlikely to follow in Exclusive's footsteps and acquire in the US, Schlichtherle indicated, however.

"The business model in APAC is closer to what we do in EMEA, so APAC for us seems like the next step," he explained.

"[According to the statistics] around 70 per cent of the cybersecurity revenue in EMEA is two tier. It's substantially lower in the US - at around 50 or 55 per cent.

"Most of the vendors have quite an extensive salesforce in the US, whereas in Europe and APAC they can't hire that many people - that's why they use distributors. The value proposition and value add is much higher in Europe and APAC, and hence the margin is also better. As much as I like the US marketplace, I think it's margin dilutive."

VAD revamp

The brand refresh comes after Infinigate's acquisitions of DB2, Nuvias, Vuzion and Starlink in January, July, August and October of 2022.

The added scale those four acquisitions bring will propel Infinigate's pro-forma revenues for its year to 31 March 2023 to a minimum of €2.2bn, Schlichtherle confirmed.

The rebranding - which will see the Nuvias name dropped and Vuzion rebranded as ‘Infinigate Cloud' from today - is about more than just a change in stationery, he stressed.

"We now have a real EMEA scope and a global ambition. That's why we wanted to have a new logo, new tagline, and go out with the message that Infinigate is taking the next steps as a company," he said.

"All the different flavours from the different companies are represented."

Middle Eastern acquisition Starlink will be rebranded later this year, with the entire integration process of the enlarged organisation set to be completed by the end of 2023, Schlichtherle said.

Chase the white space

So what will the next phase of the Rotkreuz, Switzerland-headquartered distributor's growth look like?

"We have been growing organically at around 20 per cent every year for the last 15 years, and we want to drive that organic growth further," Schlichtherle said.

"But we also want to do further M&A, as I think there's still a lot of room for consolidation.

"We still have a couple of white spots in our EMEA landscape geographically, and we will fill that up for sure. €5bn is quite a substantial number, but when you do the maths - 20 per cent growth every year plus a bit of acquisitions - it's a fairly reasonable target to get to."

Any expansion outside of EMEA will come on top of that budgeted growth.

The fact that Infinigate lacks full geographic coverage with most of its vendors presents another growth opportunity, particularly considering that many of them are downsizing.

"A lot of vendors are also thinking about consolidation of distribution - we had one of our biggest vendors saying ‘we have 70 distribution partners in Europe; we want to cut it down to 20'," he said.

"We are benefiting from [the cutbacks], because we have the relevance to help those vendors stay afloat, even though they may need to cut resources."

Vendor agenda

Although Infinigate tends to take on vendors only once they have established some presence in Europe, some - including Cybereason and Cato - are seeing "explosive" growth, right now, Schlichtherle said.

"Those are the companies we can actually help the most by scaling them across EMEA very fast," he said.

Secure cloud, via the Vuzion acquisition, represents another "big opportunity", he added.

"[Vuzion] is a pure SaaS-driven business model, with Microsoft 365 and Azure, mainly. But we want to offer customers a secure cloud value proposition with all the security vendors in our portfolio," Schlichtherle said.

"It will take a bit of time, because the rollout is obviously quite big, and goes across all the countries."

That laser focus on cloud and network security will provide Infinigate with one key differentiator as it chases its €5bn revenue goal, Schlichtherle concluded.

"I don't see anybody except Exclusive [as a competitor]. We have different vendor set ups, but we are more or less growing in parallel," he said.

"But what I think sticks out for Infinigate is that we're focused on cybersecurity completely. We don't touch other areas, because we believe that there's enough growth in the cybersecurity space for years to come."