Clear Vision Impact Fund, overseen by SWS Capital Management has invested in Valeo Networks, a Top 250 MSSP based in Rockledge, Florida. Valeo will leverage the funding to pursue mergers and acquisitions, the companies indicated. Financial terms of the investment were not disclosed.
Valeo has M&A experience, having acquired four MSPs and MSSPs in 2020. Example M&A deals include Etech Solutions, Network Management Services, Saalex Information Technology, and Arctic MSP.
A closer look at those deals and you'll notice some IT services outside of the cybersecurity landscape. But clearly, Valeo is now doubling down on the managed security services opportunity.
MSSP Receives Funding, Pursues Acquisitions: Executive Perspectives
In a prepared statement about the new funding, Valeo Networks CEO Travis Mack said:
“We are humbled and truly excited to grow with our new partners at Clear Vision Impact Fund. We’ve had many opportunities to partner with other investment firms, but SWS Capital Management and the Clear Vision mission and dedication to being more than just another investment firm rang loudly to me and perfectly aligns with Valeo Networks’ aspirations of being more than just another Information Technology company. We look forward to incredible advancements and growth in the near future.”
Added Christopher Williams, CEO of SWS Capital Management:
“Travis and the Valeo Networks team have built an excellent business, differentiated by its leadership, its broad range of capabilities and experience supporting its target markets. We are excited about the opportunities before them in the highly fragmented MSSP sector. We look forward to expanding our relationship with Valeo Networks by providing both financial capital and support.”
Valeo Networks claims to rank among the top 5 percent of revenue generating MSSPs nationwide, though MSSP Alert does not have actual financial figures to affirm that statement.
MSSP Mergers, Acquisitions and Investments: Deals to Note
Valeo will face competition in the M&A market for MSSPs. Indeed, private equity firms, venture capital companies, software companies, MDR (managed detection and response) service providers and peer MSSPs have been in acquisition mode.
Key private equity moves in the MSSP market include:
- August 2021: Periscope Equity invested in CrowdStrike partner CyberMaxx, a Top 250 MSSP that provides managed detection & response (MDR) security services to healthcare organizations.
- April 2021: Growth Capital Partners (GCP) invested in Bridewell Consulting, an MSSP & MDR service provider.
- February 2021: Apax Partners acquired Herjavec Group, the Top 250 MSSP founded & led by Shark Tank angel investor Robert Herjavec.
- October 2020: Newlight Partners invested in MDR startup Pondurance.
- January 2020: Skyview Capital acquired Fidelis Cybersecurity, an MDR service provider with threat detection, hunting & incident response capabilities.
- October 2019: BGH Capital launched CyberCX, a cybersecurity consulting firm formed from 12 acquired businesses in Australia.
See a list tracking dozens of MSSP mergers and acquisitions here.
What's Driving MSSP Mergers, Acquisitions and Investments
At least five factors are driving the M&A activity, MSSP Alert believes.
- Talent: The cyber skills shortage is driving MSSPs to find talent through M&A.
- Threats: The growing, shifting threat landscape is inspiring M&A deals to close technology and expertise gaps.
- Speed to Market: Acquiring companies can often be a faster path into a new or evolving technology market or business region.
- Scale: Smaller MSSPs are merging to counter the scale of larger rivals.
- Growth: The traditional MSP market will experience sub-10 percent compound annual growth rates (CAGR) in the years ahead. The MSSP market, in stark contrast, is growing at an 18 percent CAGR.
