11 months ago, the world shut down and now 11 months later, much of our lives have shifted to remote. Overnight, businesses were forced to adjust their operations to support working from home. In order to support this dramatic shift, companies needed to ensure that they have the proper IT support infrastructure in place to address the reshaped reality of work. Electric, a pioneer in the tech-enabled managed service provider (MSP) space, was able to support the needs of the small and medium-sized businesses that lacked the in-house resources to manage this process. The company’s 100+ IT technicians are able to fully remotely manage things like a client’s networks, devices, security, applications, onboarding, and data monitoring. Employees are able to reach an IT expert within 10 minutes to handle their inquiries using popular chat communication platforms like Slack or Teams. Electric now provides support for over 400 businesses that comprise 20,000+ employees. In 2020, Electric doubled its revenue and team size to support its next phase of growth.
AlleyWatch caught up with CEO, Cofounder, and repeat entrepreneur Ryan Denehy (Swarm Mobile acquired by Groupon) to learn more about the value that Electric brings its partners, the company’s impressive traction, future plans, and latest round of funding, which brings the total funding raised to $100M+.
Who were your investors and how much did you raise?
$40M – this is our Series C. Greenspring Associates is leading the round and all of our major investors participated; Bessemer Venture Partners, GGV Capital, 01 Advisors and Primary Venture Partners. We also added a couple of new investors; Atreides Management and Vintage Investment Partners.
Tell us about the product or service that Electric offers.
We make IT easy for small and mid-sized businesses. In the last 4 years we’ve become the industry leader for world-class IT technology and real-time support in our segment. We now have over 400 customers and 20,000 end users. Just about every company these days needs help with the laundry list of IT needs: security, device & inventory management, network & server management, application management, employee on-boarding and off-boarding, procurement & provisioning etc. right now we’re the only company who can provide this in an all-in-one package.
What inspired the start of Electric?
When I was running my previous startup (Swarm Mobile, acquired by Groupon in 2014) I was also managing our IT. I would spend an entire weekend setting up laptops for new hires, and then the following week we’d have to send the sales team home because the internet was down. I was really surprised that there weren’t any startups solving all of this in a modern way. At Swarm, we also ended up selling our product through local IT providers so I got to understand the market a lot better from that side. One day it all clicked and I decided I had to do this!
How is Electric different?
For small businesses your options traditionally were to work with a local IT consultant or to have someone handle it internally who is not actually an IT person. With everything moving to the cloud both approaches seemed slow and inefficient. We decided to rebuild the IT experience from scratch by creating a self-serve dashboard along with real-time support through Slack or Teams. Fast, easy, simple, cost-effective. In most cases, Electric delivers a 105% ROI according to a recent Forrester TEI report.
What market does Electric target and how big is it?
Broadly speaking we are here to help small and mid-sized businesses. Practically speaking it’s companies as small as 10-12 employees or as large as hundreds. This is obviously a huge market!
What’s your business model?
Electric’s SaaS platform and we currently have a price per seat model like most other SaaS companies.
How has COVID-19 impacted the business?
The abrupt shift to remote work forced companies of all sizes and stages to take a hard look at mission-critical areas like IT. In order to maintain productivity, security, and business continuity outside the physical office a solution like ours is a must-have. In 2020 alone, revenue and headcount nearly doubled. We also made significant investments in our offerings, most recently through the acquisition of Sinu, one of New York’s top MSPs, strategically expanding its services and market presence on its path towards becoming the top IT technology and support provider in the country.
What was the funding process like?
It was very quick! We had a number of ‘warm up’ conversations before the holidays in December 2020 but from the time we sent out the data room to when we signed our term sheet, it was about two and a half weeks.
What are the biggest challenges that you faced while raising capital?
In the early days of the company, most people believed that the problem we were trying to solve was too complicated and that we would wind up pivoting into a much less interesting business. Fortunately, that never happened but every round we definitely have to prove ourselves.
What factors about your business led your investors to write the check?
In no particular order, a handful of things make our business appealing – the market we’re in is huge and can support multiple public companies. So far we are the only one doing what we’re doing so our path to becoming a huge company is relatively clear. Second, we’ve built a phenomenal leadership team.
Third, we’ve had really strong growth metrics and a clear line of sight to keep it going.
What are the milestones you plan to achieve in the next six months?
Keep building, growing, and delivering a great solution to our customers.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Well as CEO your first job is to not run out of money, so whatever you need to do to keep the lights on should be your #1 priority.
Well as CEO your first job is to not run out of money, so whatever you need to do to keep the lights on should be your #1 priority.
Where do you see the company going now over the near term?
Sustainable growth and investments in a fantastic product.
What’s your favorite outdoor dining restaurant in NYC?
My wife and I go to The Dutch fairly often since it’s around the corner from our place. But if it were 100% up to me, I’d get deep dish pizza at Emmett’s on MacDougal every week!
