Greenspring Associates Leads Series C Round
Based in Baltimore, Greenspring Associates led the Series C funding round in the company. The fund's exited investments include Cloudflare (a technology company that went public in September 2019) and DocuSign (a digital signature company that went public in 2018). Other investors in the Series C round include Bessemer Venture Partners, GGV Capital, 01 Advisors, Primary Venture Partners, Atreides Management, and Vintage Investment Partners.
Company Uses a Customer Council for Input
As the startup company grows, it formed a customer council in 2020 to engage key business customers. The council includes Big Spaceship, Boxed, Mercari, and Newhouse. Additionally, the IT service startup has more than four hundred customers.
Mercari uses Electric to provide support to more than two hundred employees. Supported technologies include Apple, Cisco, Meraki, and Slack.
Growing Appetite for Outsourced IT Services
Professionals in a large business are used to having a dedicated technical help desk. In a small company, organizing an IT service department might not be feasible. Electric is making progress in winning small business customers who have never used a managed service provider before. More than 50% of Electric’s business customers acquired in 2020 had not previously worked with a managed service provider before.
Growth Through Acquisition in 2020
Electric grew in late 2020 by acquiring Sinu, a New York-based managed service provider company. Founded in 2000, Sinu offers several technology services to business customers like cloud migration and hardware as a service.
“We founded Sinu to deliver overwhelming value to clients through a pioneering standardized, unlimited support IT Department as a Service. With Electric, we have a partner who is accelerating service delivery through Artificial Intelligence,” said Larry Velez, CTO and founder of Sinu, to Information Age.
Electric commissioned Forrester Research to estimate the economic impact of using Electric. The February 2021 report found that the payback period was less than six months. Also, the company found a 105% return on investment (ROI) from using Electric over three years. Furthermore, Forrester is a business that publishes market research, consulting, and business events. In 2020, the business (stock ticker NASDAQ: FORR) generated $449 million in revenue and $30 million in net income.
The Managed Service Provider Market
Small business managers dedicate a significant portion of their resources to managed IT services. According to Spiceworks research, managed services spend now accounts for 16% of the IT budget in 2021, up from 14% in 2019.
On a global basis, the managed services market was worth $223 billion in 2020, according to Markets and Markets data. Furthermore, the managed services market is forecast to grow at a compound annual growth rate of 8.1% between 2020 and 2025. Of particular note to Electric, small and medium-sized businesses are expected to increase their spending on managed service providers over the next few years.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book, "Project Managers At Work," shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.