The round was led by Greenspring Associates, with participation from Electric’s existing investors including Bessemer Venture Partners, GGV Capital, 01 Advisors and Primary Venture Partners. The company has raised more than $100 million since being founded in late 2016.
Electric raised the new cash after more than doubling in revenue and headcount last year, said founder and CEO Ryan Denehy.
“We had a great year,” he said. “So we figured we would go out at the top of the year and raise money so after that we could just get back to business.”
An obvious problem
The company solves an obvious problem — providing IT services and support to small and mid-sized businesses that normally have no or very small IT departments. The company’s SaaS platform provides software that helps automate many services, as well as a full support desk.
Denehy said about 80 percent of Electric’s nearly 500 customers have no IT staff, even as most companies are using four times the amount of applications from just four years ago.
“This is a hard problem to solve,” said Jeff Richards, managing partner at GGV Capital. “The complexity of most IT departments is 100x what it was just 10 years ago.”
It is estimated the SMB market spends more than $100 billion on IT annually, said Richards.
“There are not many markets as big as this,” he said. “And it’s only growing.”
Richards said he looks at Electric similar to two public market comparables — Jamf and RingCentral. Jamf creates software to help manage Apple software and has a market cap of more than $4.6 billion. RingCentral helps SMBs manage their telecommunications and has a market cap of more than $36 billion.
The RingCentral comparison is especially valid, as it solved an obvious need for smaller businesses, said Richards, who regrets not investing in that company years ago when provided the chance.
Electric may offer atonement.
“This is my chance to make it up,” Richards laughed.