Datto IPO Could Help Capture More of a 'Ripe Market'

A Datto IPO could help the company serve more clients desperate for ransomware protection.

That’s according to Dennis Hahn, data center storage analyst at Omdia. A Bloomberg report says Datto confidentially is moving forward with an initial public offering (IPO) that could come as early as this year. It cited people familiar with the matter.

Vista Equity Partners owns Datto, which isn’t sure if it should list its shares this year or in 2021, the report said. The IPO could be worth more than $1 billion.

When contacted, Datto said it can’t comment on the report.

Omdia’s Dennis Hahn

“At this time, Datto’s focus is on maintaining a strong company for its partners, employees and stakeholders,” it said.

A number of Datto partners, when we asked, chose to stay silent on the issue.

Big Demand for Ransomware Protection

In general, making air-gapped copies for ransomware protection is a growing business, Hahn said. Air gap backup and recovery ensures one copy of an organization’s data is offline and can’t be accessed. If a file or system of files has no connection to the internet or a LAN, it can’t be remotely hacked or corrupted.

Cohesity and Rubrik also provide data backup.

“I know, Cohesity and Rubrik have reported strong revenue growth in the past, but Cohesity has also experienced layoffs recently,” Hahn said. “Companies are desperate for solutions to ransomware, so if more capital allows them to capture more of a ripe market, it would likely be a good move.”

Datto has hired Morgan Stanley, Bank of America, Barclays and Credit Suisse Group AG as underwriters on the proposed offering.

Datto would be the latest listing in software. Other technology companies that have debuted on the market this year include ZoomInfo, Shift4 Payments, Exasol, Kingsoft Cloud and more. Earlier this month, Rackspace filed an S-1 for a proposed IPO. And last month, Snowflake confidentially filed for an IPO.

Also on Monday, Datto announced its acquisition of Gluh. The Australia-based company’s platform allows MSPs to simplify the procurement of IT products and services for their clients.

Datto said Gluh’s platform has been shown to boost sales and improve operational efficiency, leading to increased profitability for MSPs.