Private equity firm Insight Partners said Thursday it will acquire data management company Veeam in a deal valued at $5 billion that will move the Swiss software maker’s headquarters to the United States and install a new executive team as it pivots into a new market.
“It’s rare to find a company of this size that still has a huge amount of room in terms of growth potential,” said Mike Triplett, a managing director at Insight Partners who sits on the Veeam board. The New York-based venture capital and private equity firm led Veeam’s $500 million funding round last January. It declined to disclose further financial details about Thursday’s transaction. Triplett will be joined on the board by two other directors from Insight Partners, as well as Nick Ayers, the former chief of staff to Vice President Mike Pence.
Originally focused on data management for on-premises data centers, Veeam has expanded to provide enterprise application support and data management for native cloud platforms such as Amazon Web Services, going head-to-head with competitors such as Commvault, Veritas Technologies and Dell EMC. The Barr, Switzerland-company was ranked No. 27 on the Forbes 2019 Cloud 100 list.
Cofounder Ratmir Timashev reportedly said at a 2018 Veeam conference that “there is not a single reason” to sell the company. But the company is now undergoing a shift to what Timashev calls “act two”: winning the hybrid cloud market, or the combination of on-premises data centers with cloud services such as AWS, Azure or Office 365.
“When there’s a new market, you only have two or three years to win that market,” Timashev, executive vice president of worldwide sales and marketing, told Forbes. “I always use the analogy of iPhones—once you create the iPhone, then you will dominate that market for the next five, 10 or 15 years.”
Winning that battle is the impetus for Veeam’s transition to become a U.S. company. It is the market share leader in EMEA, per a 2018 IDC report, with about 55% of revenue coming from Europe, compared to 30% from North America. “We started the company around the 2007 financial crisis, so we decided to be very conservative for North America and we underinvested in terms of sales and marketing,” Timashev said. As Veeam transitions to focus on a new market, it will recenter operations near the majority of large enterprises, helped by the resources of Insight Partners.
“The largest market opportunities, they’re in the enterprise, they’re in the government sectors, they’re in the cloud,” said Danny Allan, who Veeam promoted to chief technology officer earlier this week. “All the major players for the hyperscale public cloud are based in the U.S., so being centered there gives us the opportunity.”
Timashev and CEO Andrei Baronov, the other cofounder, will step down from the company’s board and transition out of the company by mid-2021, according to a company spokesperson. The pair will serve as consultants for a new executive team to be led by incoming CEO William Largent, Veeam’s executive vice president of operations. He is no stranger to the position—Veeam has seen multiple iterations of CEOs or co-CEOs in recent years, including a stint with Largent at the helm from 2016 to 2017.
Veeam has not determined the location for its new headquarters. In a press release, Largent said the company would expand its U.S. workforce of more than 1,200. The acquisition is expected to be finalized around March, said Timashev.
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