Microsoft Cloud Automation Software Developer SkyKick Raises $130M

“This is an important milestone, if you will, that recognizes the value that MSPs bring to the market,” co-founder and co-CEO Todd Schwartz said in an interview with CRN.

SkyKick, which provides cloud automation software and services for Microsoft partners, has raised a $130 million round of financing with plans to invest in improving its products and hiring 100 new employees across all departments, including product and partner success.

This is the Seattle-based company’s sixth insider-led round, according to a statement Tuesday. Morgan Stanley provided a combination of debt and equity for the round. Current investors Navin Thukkaram, Craig Nerenberg, Hawk Equity, Trebuchet Capital, Schechter Private Capital and other technology private investors participated in the round. The company has raised $200 million to date.

[RELATED: SkyKick Accelerates Its Office 365 Migration Platform]

“This is an important milestone, if you will, that recognizes the value that MSPs (managed service providers) bring to the market,” co-founder and co-CEO Todd Schwartz said in an interview with CRN.

SkyKick launched in 2011 with its platform for facilitating Microsoft Office 365 migrations. It later added a backup service and QuantumSync, a feature that accelerates most migrations by two to four times while also improving security.

The company recently launched Cloud Manager, a no-code, low-code automation, workflow and management application to administer and secure MSP customers in the cloud with the goal of saving MSPs hours of time.

Cloud Manager sales have grown more than 1,000 percent in the past year, according to a company statement Tuesday.

SkyKick has grown to 30,000 partners worldwide and 250 employees. Among its customers are CDW, GoDaddy and SHI.

Schwartz said he and his co-founders started the company to bring enterprise-level cloud tools to small- to medium-sized businesses and realized the best way to reach SMBs is through the channel.

“We looked at the SMB market, and we said, ‘Look, there‘s just not a lot of people helping SMBs,’” he said. “And when we even looked further, the heroes, the unsung heroes of the SMB market, were the MSPs. And when we looked at that market, there were even fewer companies servicing MSPs, and even fewer still that were 100 percent focused on MSPs. So for us, we saw a tremendous opportunity to help the MSP to find a customer set that we thought would need some help.”

SkyKick’s offerings include automations for Microsoft 365 migrations from on-premises Exchange and Google, cloud backup for M365 and SharePoint and unlimited, free technical support, according to its website. The basic SkyKick plan starts at $199 a month if partners pay for the year.

The company’s executives credit the pandemic with getting more SMBs into the cloud and getting interested in adopting more cloud tools for business. The rise in SMB adoption also means greater need for solution providers that can educate SMBs on picking the right tools and manage cloud services for them.

And, in turn, a greater need for automation software providers like SkyKick that work with MSPs to save solution providers from needing to retrain existing employees or hire new ones, the executives told CRN.

“They just had this surge and wave from their customers that might have been moving a little bit slower, they thought they had a bunch of time,” SkyKick co-founder and co-CEO Evan Richman told CRN in an interview. “And then all of the sudden, they moved in. And I think as they make that move, whether it be to Teams, whatever collaboration tools, or email, then you‘ve made that first initial move to the cloud. And you start thinking about other things that you can do in the cloud.”

“The cloud’s only getting started,” Schwartz said. “It‘s a $100 billion MSP market out there. There’s a lot of business happening and it’s growing double digits. And it’s accelerating with the proliferation of SaaS. And yet if you look at penetration, most organizations only have one or two applications, and yet you look at the average enterprise and they’ve got 30 applications. So we see the trend, and the complexity will increase. And so we think that cloud is still very early days in the SMB market.”