Datto Holding Corp. began trading today on the NYSE with the channel-focused ticker symbol MSP.
CEO Tim Weller rang the opening bell as shares in the cloud-based platform opened at $27. The Norwalk, Conn. based company expects to raise $594 million off the IPO some of which will be used to pay off more than a half a billion in debt.
Initially, 22 million shares will be available with underwriters allowed to purchase an additional 3.3 million shares.
The storage and back-up company created in a Connecticut basement in 2007 by tech guru Austin McChord was bought by private equity in 2017 and merged with Autotask to create a rival to MSP platform heavyweights ConnectWise, Kaseya, and Solarwinds MSP. McChord posted ‘#MSP’ to his LinkedIn account with a picture of digital Datto banners festooned on the floor of the New York Stock Exchange.
Current CEO Tim Weller has said that the debut of Datto’s stock on the NYSE is a win for the MSP ecosystem.
“This is your time,” Weller wrote to MSPs in a letter that accompanies the filing. “Please know that being a public company will not change Datto’s core. We are excited to expand our investor base and champion the MSP ecosystem. Our MSP-first culture is deeply rooted—in technology innovation through your eyes, in our shared recurring revenue business models designed for you to capture profitable growth and build the value of your business.”
Datto boasts 17,000 MSP partners and generated annual recurring revenue of $507 million as of June 2020. Based on the valuation range, Datto’s market capitalization will be somewhere between $3.8 billion and $4.2 billion when shares are expected to begin trading Oct. 21.
In its IPO filing Weller said he plans to target SMB customers who are looking to MSPs as a partner in their digital transformation journey.
“We believe SMBs will adopt technology faster than ever as the world emerges from this pandemic,” he wrote in a letter that accompanied Datto’s filing. “We expect MSPs will help them more than ever. Datto will be there as technology creator, thought leader and support partner as they deploy new applications; navigate technology on-premises, in public clouds and in hybrids of both; and continue to defend against proliferating security threats.”
Weller gave investors a bullish outlook, saying the company has grown subscribers 19 percent year over year, and the customers it competes for in the global MSP channel “now manage well over 10 [percent] of the global SMB IT spend, which is $159 billion and growing.”