MSP Power Play: Electric Scores $90M In Funding

‘Our plan was to go out and get investment for growth. We needed investment to hire software engineers and build our platform. We knew we needed to invest in sales and R&D. Fortunately our existing investors were excited about what we’re doing so there was no need to spend a couple of months pitching new investors,’ says Ryan Denehy, Electric CEO and founder.

Managed service provider Electric Tuesday unveiled a new funding round of $90 million the company will use to build out the proprietary software it uses to provide services to its clients.

The new Series D funding round, led by existing investor GGV Capital and including investment from all the company’s exiting investors, brings total funding in Electric to $190 million, said Ryan Denehy, CEO and founder of the New York-based company.

“Our existing investors decided to put together a new round without the need for us to go on a road show,” Denehy told CRN. ”That was music to my ears.”

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Electric had an aggressive plan to grow its 2021 business by 100 percent, but is now on pace for 110 percent growth, Denehy said.

“Our plan was to go out and get investment for growth,” he said. “We needed investment to hire software engineers and build our platform. We knew we needed to invest in sales and R&D. Fortunately our existing investors were excited about what we‘re doing so there was no need to spend a couple of months pitching new investors.”

This is Electric’s second round of funding in 2021. The company in February closed a $40 million funding round.

Denehy said he expects Electric will have one more funding round before moving to IPO in two or three years.

Electric is a software-centric MSP focused on the small business market. Unlike most MSPs, however, it is building more and more proprietary software to bring a modern end-user experience to its clients with less reliance on human delivery of services, Denehy said.

“Most MSPs are not focused on building proprietary software,” he said. ”We want to make managed services accessible to any small business, and we can only do this with automation. Off-the-shelf software can only offer standard solutions. We want to offer boutique solutions for any size business.”

There are no software platforms today that make managed services easy for smaller businesses that have no IT departments, Denehy said.

“Most software makes IT departments better, or MSPs run better,” he said. ”But no one is focused on helping end customers run better. Our average customer was using eight different SaaS applications when we started in 2016. Now it‘s 35. If you are a small business using 35 SaaS applications, you are struggling. We are building automation to run those SaaS apps efficiently and cost-effectively.”

Electric does all the functions that traditional MSPs do, but automates them, Denehy said.

“Any customer can log in and get a view of their IT, how the devices are doing, the state of their licenses, and so on,” he said. ”This is what any MSP can do, but it‘s usually done in a ’black box.’”

Electric has been busy on the acquisition side. The company in September acquired Techvera, a Texas-based cloud-focused and security-focused IT solution provider. That followed

Electric late last year also acquired New York-based SINU as a way to expand its reach across the New York metro area.