Vector Capital Taking Reins of WatchGuard Technologies as Majority Owner

Vector Capital is taking majority ownership of WatchGuard Technologies. It’s acquiring interests previously owned by Francisco Partners and other co-investors.

Vector and WatchGuard didn’t disclose financial terms of the transaction. It should close by the end of the third quarter subject to customary conditions.

During Vector and Francisco Partners’ joint ownership for more than a decade, WatchGuard transformed from a network security vendor to a cybersecurity platform provider. The company’s Unified Security Platform enables more than 17,000 MSPs to protect the environments, users and networks of more than 250,000 businesses worldwide.

Vector will partner with WatchGuard’s management team to help the company grow.

Impacting Partners in a Positive Way

Michelle Welch is WatchGuard‘s senior vice president of marketing and channel. She said the majority ownership change will impact partners in a positive way.

WatchGuard’s Michelle Welch

“Vector Capital’s large new equity investment in the business will amplify and accelerate our vision to make WatchGuard the security platform for MSPs,” she said. “This means even more platform innovation and continued investment in our partner support and enablement mechanisms. All of which leads to a better experience and more revenue opportunities for our partners.”

WatchGuard already gives partners a competitive advantage with its partner-first, unified platform approach for security, Welch said.

“But Vector Capital’s new investment in WatchGuard will allow us to further build on that vision in two key areas,” she said. “First by driving organic investment to accelerate our road map, and second through M&A to expand WatchGuard’s scale and … platform capabilities. More specifically, that means increased investment into cloud transformation, secure access service edge (SASE), extended detection and response (XDR), managed detection and response (MDR), and continued innovation in security automation and simplification for MSPs, among other areas.”

New Opportunities for Partners

The increased investment will create new opportunities for partners to expand their product and service portfolios, Welch said. They’ll also become more efficient in their service delivery. Both should lead to greater profitability, the company said.

“Our team has an aggressive roadmap designed to drive product innovation and partner enablement with our unified security platform through 2022 and beyond,” she said. “And we look forward to sharing more once the transaction closes.”

Sandy Gill is Vector’s managing director.

“MSPs represent the future of security delivery,” he said. “But to be successful, they need a bespoke platform built for their needs. WatchGuard is uniquely positioned to lead the market in enabling those MSPs with its unified security platform. We are excited to further invest both organically and via acquisitions in the company’s mission to deliver security-focused MSPs one vendor, one platform and one vision to build their business upon.”