WndrCo’s Portfolio Firms Eye More Sales Via The Channel

‘We’re seeing more and more the power of the channel,’ says WndrCo founder Jeffrey Katzenberg.

Jeffrey Katzenberg’s WndrCo may have grown more “cautious” about the U.S. economy, but it’s anything but cautious when it comes to the channel.

The Los Angeles-based venture capital firm has said it has pulled back bit on its technology investments over the past 18 months, citing concerns over the state of the U.S. economy.

But Katzenberg, co-founder of WndrCo, and Sujay Jaswa, the other co-founder of the VC firm, said in a joint interview with CRN that they’ve grown to be big fans of MSPs, resellers and other channel players since their firm’s founding in 2017—and want to expand those relationships.

“Absolutely, we want to do that,” said Katzenberg, referring to WndrCo growing its channel connections. “We value and understand the opportunity in partnerships to better align with the channel. … We’re seeing more and more the power of the channel and want to really devote resources to it through [WndrCo’s] portfolio companies.”

Today, WndrCo’s $750 million portfolio has invested in about 35 tech companies, many of them cybersecurity firms, such as Aura and Twingate.

Jaswa, the former head of global business and CFO at Dropbox, said one of the biggest challenges in building up young security companies “is that this market is so big.”

“Every company and every consumer in the world is going to be adopting a variety of products to protect themselves and their companies or their families and obviously governments as well. Doing it on your own is virtually impossible as a company. You need to partner with the channel. And you absolutely need people who have the distribution heft to get the best products in front of the largest audience possible.”

He said it’s particularly important for startups and other smaller tech vendors to work with the channel.

“If you don’t partner effectively with the channel, what ends up happening is that the large legacy incumbents are by definition going to have an advantage, even if the most innovation is happening in the kind of companies that we’re funding,” he said.

“So for us building really deep ties to companies and communities that get cutting-edge technology into the hands of partners and customers is the major opportunity and challenge of the next decade,” he added.

Katzenberg and Jaswa didn’t say what percentage of their portfolio companies’ sales currently come via the channel, but they made clear they intend to increase their firm’s channel-tied activities.

Paco Lebron, president and CEO of ProdigyTeks, a Chicago-based MSP, said he’s recently seen a growing emphasis by vendors on beefing up their channel activities, especially vendors in the security sector.

The goal of such efforts is usually to increase a company’s SMB sales, said Lebron.

As for WndrCo’s stated aim of boosting its portfolio companies’ revenue via the channel, Lebron said it’s a smart move.

“They don’t have to develop a new sales force,” he said. “They don’t have to develop new marketing teams. They have the channel. It’s a good solution.”

WndrCo’s more aggressive push into the channel comes as the venture capital firm said it will start investing more of its funds in enterprise security firms, rather than consumer security firms.