Backup and disaster recovery software company Datto could launch an initial public offering this year, people familiar with the plan told Bloomberg. Datto, which has not decided whether to list the shares this year or in 2021, has confidentially filed for an IPO that could see the company valued at $1 billion, Bloomberg reported.
Datto was founded in 2007 and was acquired by Vista Equity Partners in 2017 for $1.5 billion.
At the time of the acquisition, Vista Equity Partners merged Datto with Autotask, combining its PSA and RMM tools with Datto’s backup and recovery offerings. The company competes with ConnectWise, Kaseya and SolarWinds MSP for IT service management customers.
At the time of the 2017 merger, the combined organizations had 1,300 employees in nine countries, as well as 13,000 technology partners who served more than 500,000 SMBs worldwide.
Among its competitors, only Solarwinds, the parent company of SolarWinds MSP, is publicly traded. Kaseya and ConnectWise are also owned by private equity.
In May Datto instituted a round of what it said were pandemic-driven job cuts, with CEO Tim Weller telling CRN USA in a statement that the company had anticipated more growth in 2020 for MSPs and Datto but had to adjust those expectations.
“Our actions mean rolling back our global team size to where it was six months ago,” Weller said.
Datto elevated its high-touch account management and direct-to-tech support even as employees moved to working from home so partners’ day-to-day interactions would not change, Weller said. According to Bloomberg, Vista Equity Partners has won the support of Morgan Stanley, Bank of America Corp., Barclays Plc and Credit Suisse Group AG as underwriters on the proposed offering.
Vista Equity Partners—which has more that $50 billion in assets under management—last year raised $16 billion in a round of funding targeted at the tech sector, according to The Wall Street Journal.