New Haven Register (New Haven, CT)
Ransomware security firm sold for $6.2B
NORWALK — Datto is being acquired for $6.2 billion by a Miami company, just 15 years after its launch by Austin
McChord and rocket growth to join the exclusive club of “unicorn” startups in Connecticut valued above $1 billion.
Datto has its main office in Norwalk under CEO Tim Weller, with the company entering this year with about 2,100 employees, including 520 working in other countries. McChord stepped down in 2018 in advance of Datto filing notice of its plans to become a publicly traded company. Miami-based Kaseya is offering $35.50 for each share of Datto, which traded at $28.73 on Friday.
McChord created a company providing data backup as a service for clients lacking the resources of major corporations, allowing them to retrieve information and files in the event of crashes or hacks. Datto sells its backup and security offerings through other companies that provide a range of information technology services.
Datto more than doubled its profits last year to $51.4 million, as revenue rose 19 percent to $577 million.
Founded in 2000, Kaseya also provides security software through managed service providers. In a prepared statement, CEO Fred Voccola indicated the company has a history of retaining the branding and workplace cultures of the businesses it acquires.
Kaseya is funding the transaction with cash from Insight Partners, TPG Capital and other private equity investment firms.
Hackers successfully infiltrated Kaseya’s own systems last year in a ransomware attack, demanding $70 million to restore access to computers. Authorities arrested multiple people in Ukraine and Romania last year on suspicion of orchestrating the attack through the REvil organized crime group. The U.S. Department of Justice said it recovered $6.1 million that had been paid by multiple victims.
Datto has made security a cornerstone of its marketing to smaller businesses that lack the ability to maintain sophisticated IT departments to keep up with the array of threats.
Speaking in February on a conference call, Weller said Datto’s Ransomware Detection suite is now used by some 1.7 million entities to identify potential incursions.
“Ransomware Detection, which was built in-house in fairly short order before launch, we’ve now extended it quite a bit,” Weller said in February. “What it catches is pretty amazing.”