Cloud services vendor BitTitan has raised $15 million in series A financing from two sources. The Kirkland, Wash.-based company plans to use the money to enhance its MSPComplete solution as well as rapidly expand its presence into new regions including Canada.
Rocco Seyboth, BitTitan’s vice president of marketing, told CDN the company is strongly thinking about establishing a “bricks and mortar” office in Canada. “There is a huge opportunity in Canada and it’s not just because of the IT service provider market. Canada is a mature, forward thinking market and it compares favourably to any other place in the world. There is a big ecosystem of players and it now has two Microsoft data centres. We think the growth in Canada will accelerate even further than what it is now and we want to be a big part of that,” he said.
There is still a lot of planning to be done and there is no timeline in place for establishing BitTitan Canada, Seyboth added. The company has started the ball rolling by hiring an executive to handle partner technology strategy specifically for the Canadian market.
Expansion outside the U.S. market is an important step for BitTitan. Seyboth said that 40 per cent of BitTitan revenue is outside the U.S. currently and the company has been producing this revenue with single individuals in countries such as Canada and several others in Latin America.
“We want to aggressively expand internationally and get more feet on the street,” he said. Right now BitTitan has just one office outside of Kirkland in Singapore and that facility is for development and support.
Besides Canada, BitTitan is interested in Latin American countries, AsiaPac countries such as Australia and Japan and central Europe countries such as Germany, France and Italy.
The $15 million series A financing was led by TVC Capital, a San Diego-based growth venture fund focused mostly on software companies. The other partner is the San Francisco-based Tao Capital Partners; a company that invests primarily in technology and alternative energy. Tao was co-founded by Nicholas J. Pritzker of the Hyatt Hotel chain. Tao investments include Uber and Tesla Motors.
Seyboth made it clear to CDN that the company did not need the $15 million funding.
BitTitan has been able to double its revenue base without any outside funding. Seyboth said there have been many VCs knocking on their doors with sheet offers and it enabled the company to be selective.
“We never wanted outside funding. The reason we did it now is an interesting narrative with cloud. Cloud is emerging and we are driving this to some extent. Gartner sees cloud becoming a $360 billion spend by 2020. If you put that into context the average IT spend on an annual basis is $4 trillion so it’s just a fraction of the overall market,” he said.
BitTitan’s strategy banks on SMBs adopting cloud as well as big cloud providers such as Microsoft, AWS, Google, DropBox and IBM (SoftLayer) pushing cloud as the new consumption model of choice. Seyboth believes both sides want this.
“So why is it just one per cent of the market?”
Seyboth said managed services providers and IT service providers are the key to the adoption of cloud as they are in the middle of the transactions. BitTitan’s MSPComplete solution can drive this strategy for channel partners along with data centres from Microsoft not just in Canada, but in the U.S. as well.
“This is a sign that the cloud market is maturing and gaining traction,” he said.
The timing of the $15 million in funding is important considering the economic climate in the VC space, Seyboth added. Typically VC funding on round two is not as lucrative as round one and Seyboth said it shows the venture capitalists see the cloud market growing and believe MSPs will be the catalyst for adoption.
