As cybersecurity continues to grow in profile amid an increasingly complex and dangerous landscape of malicious activity, a cyber security vendor that specializes in “all-in-one” services covering the many aspects of security IT has closed a big round of funding to grow.
Acronis has raised $250 million, money that co-founder and CEO Serguei Beloussov said in an interview the company plans to use both to grow organically, as well as for acquisitions to bring more “proactive” technology into its portfolio. The funding is being led by CVC and values Acronis at over $2.5 billion.
Originally a spinoff from the parent company of virtualization giant Parallels, Acronis initially made its name in data recovery and backup but has over time expanded to provide an all-in-one package of services, a business that is now profitable, with some 10,000 managed service providers and 500,000 businesses (SMBs and bigger) among its customers.
“We didn’t need the money, but now we will invest it to grow faster and capitalise on our leadership,” Beloussov said in an interview.
New-wave revenues, based on its newer (not legacy) products such as Acronis Cyber Protect, grew 100% during the pandemic, he added. “We are spending they money on engineers and M&A to complement our cyber protection,” he said. “We have a single mission, which is to protect all data applications, providing privacy and security in one package. We protect about 10 million workloads today and we are aiming to grow that to 100x. There is a lot to do in terms of making that protection easier and deeper for our customers.”
He said that while the company is continuing to remain private, it’s also starting to think about its next steps, which could involve a public listing or a sale, in the next 12-24 months.
“With private equity investors like Goldman Sachs [which led its previous round in 2019] and CVC, they definitely expect liquidity at some point,” Beloussov said.
The funding and Acronis’s strategy to double down on growing its business comes at a key moment in the world of cybersecurity. The bigger landscape in the world of business has seen a huge shift in the last year to more people working remotely and across a wider set of geographies and devices. Although that shift was pushed along by the Covid-19 pandemic, many believe that the longer-term effect will be a very different working environment, with a greater acceptance that less people in will be spending all of their time in their offices, and that it won’t necessarily impact productivity.
What it has impacted is how IT provisions and manages networks and the device that run on them, and specifically has exposed some of the loopholes in company’s cybersecurity policies. Malicious hackers, who were hard at work well before the pandemic, have jumped on this and exploited it.
Acronis has been one of the companies that has seen a growing demand for its services as a result of all that, with Acronis’s software sold via managed service providers seeing a particular lift.
“Last year definitely pushed customers to understand that IT is mission critical and that is for every business,” Beloussov said, with security coming along with that by association. With security, though, organizations have realized that “managing by in-house resources is not always ideal so outsourcing to special service providers can guarantee service levels. With internal IT people, you can only shout at them, and that is okay because they are used to it.” Third parties, by contrast, operate with service-level agreements that are easier to enforce if something goes wrong.
“Acronis’ talented management and R&D teams have invested significant resources developing an innovative cloud-native ‘MSP in a box’ solution, with integrated backup, disaster recovery, cybersecurity, remote management, and workflow tools,” said Leif Lindbäck, Senior Managing Director of CVC Capital Partners. “Acronis provides mission-critical solutions to more than 10,000 MSPs and half a million small and medium businesses. CVC has a strong track record in cybersecurity and partnering up with successful entrepreneurs, and we are looking forward to teaming up with Serguei Beloussov and the Acronis team to accelerate the company’s growth.”