Technology Capital Investors, a firm that finances and partners with managed services providers, has taken its first step into Canada with a new Toronto office.
The New York-based company has several offices across the U.S. already and is now looking to add Canadian MSPs into its organization. TCI funds and provides technical resources and business strategy advice to MSPs that it brings into its network.
“We effectively seek to partner up more than acquire and roll up,” said Sam Attias, the company’s managing partner and founder. TCI usually acquires majority stake, not 100 per cent of a business, so company owners typically retain equity in the organization.
The company currently has no formalized partnerships with Canadian MSPs, but has begun the search process.
TCI focuses on small and medium-sized MSPs who have a strong regional or vertical focus and have between $1.5 million and $10 million of annual service revenue.
Only about three per cent of MSPs do more than $10 million of sales, he said, so the potential network for TCI is large.
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“(MSPs) typically are interested in doing a deal with TCI because they see value in our technology, our growth plan and our talent pool,” Attias said. Providing hybrid services is also critical to MSPs’ success, he added.
TCI began focusing on the investment in the MSP market in 2009. “What we realized was the landscape out there for managed services providers was really changing,” Attias said.
“The big guys started getting involved in the marketplace- Google, Amazon, Rackspace, Microsoft- and what they were doing now that they didn’t do before was go after the end client directly,” he explained.
“Obviously today, (those large companies) cannot replace the service providers. They’re solutions are very targeted and binary, but they will evolve over time.”
“I don’t think that means that the service providers are going out of business, I think they just have to change what they do for their clients and with what tools,” he said.
“We think that the Canada strategy will be separate from U.S.,” Attias said. Currently, the company’s staff are moving back and forth between the U.S. and its new Canadian office, but its presence here will be more solid soon. “Hopefully shortly, we will build out the official structure.”
TCI will begin targeting MSPs across major cities, including Toronto, Ottawa, Vancouver, Edmonton, Calgary and Winnipeg.