Upstack Buys Another Agency, Signs Direct Supplier Agreement

Upstack is adding Texium to its growing list of acquired partner firms.

Florida-based consulting firm Texium (branded as teXium) brings 3,000 customer locations in 29 countries to Upstack’s base. Chief revenue officer Michael Martin and CEO Michael Scharf are taking on the roles of partners and managing directors as a result.

“I’m excited for our customers to continue to receive the best of the best in solutions and service, now with an augmented back office,” Scharf said. “Upstack has an exciting vision for the future, and we are glad to be along on the journey.”

Upstack’s Michael Martin

Upstack did not say how much it paid for Texium. Upstack is also taking on six of Texium’s employees.

Upstack’s Michael Scharf

Upstack has acquired upward of 15 partner firms in the past year. The New York-based company is harnessing a $50 million private equity investment from Berkshire Partners and a $100 million line of credit from MidCap Financial and Morgan Stanley Private Credit.

Texium leadership fielded different offers for an acquisition. Those options included a merger, bringing on a chief operating officer or selling the business. They viewed Upstack as an opportunity to stay in the business and continue working with their customers. Agent owners who take on a role as partner at Upstack become equity stakeholders.

“Succeeding in this business is all about relationships, and that is exactly why we were drawn to the Upstack family. Upstack sees the value in customer relationships we’ve built, and our team is looking forward to continuing to nurture those relationships under the Upstack umbrella,” Scharf said.

Background

Martin and Scharf founded the agency in 2009 after working at carriers. Both are both alumni of US LEC, which Paetec bought in 2007. Windstream went on to buy Paetec in 2011. Martin started his telco career at Deltacom and also worked for Cable and Wireless. In addition, Scharf worked at AT&T for eight years.

They could offer their customers multivendor solutions as a result of starting their own agency.

“We wanted to offer our customers the best product at the best price and also install it to ensure it works. We became advocates for our customers with service providers,” Martin said.

The agency targets mid- to large enterprises. It also provided free consulting services, according to its website.

“We’re proud to bring aboard the teXium team,” Upstack CEO Christopher Trapp said. “The experience the teXium team has gained over the last decade serving more than 3,000 customer locations around the world will be a tremendous asset to the Upstack team.”

Upstack’s Christopher Trapp

Direct Partnership

Bot detection and mitigation provider Netacea earlier this month announced a partnership with Upstack.

Kirk Horton, Netacea’s newly hired vice president of channels and partners, said savvy partners can grow their revenue in a big way by tackling the issue of bot attacks.

“In my two decades of building channel programs, I’ve never seen such a significant opportunity for partners, whether they are advisory agencies, managed service providers or managed security service providers, value-added resellers or independent consultants,” Horton said.

The move represents a channel partner expanding its cybersecurity portfolio and a cybersecurity vendor leveraging the agent channel.

“As the world’s fastest- growing technology advisory platform, we need a full suite of cybersecurity solutions so that businesses of all sizes and types can count on us to match them with the best solutions for their needs. Our partnership with Netacea, and the ability to include its solution as a premier component of our comprehensive security portfolio, is a win for our customers as well as for Upstack,” said Nicholas Caruso, Upstack’s head of global channels and alliances.

It’s also notable that Upstack is not running the partnership through a technology solutions brokerage. Upstack confirmed that it is running a direct agreement with Netacea.

Trapp told Channel Futures last April that Upstack would be a customer-facing agency. His team considered a business model that mediated between suppliers and sellers. However, they preferred the direct-selling route.

“We looked at the industry and said, ‘Wow, the total addressable market for direct agents is about five times the size of the [TSB] industry and about a thousand times more fragmented,” he said.

Read our Q&A with Caruso to learn more about the partner firms Upstack has acquired.