Carlyle Acquires 1E.com for $270M - Endpoint & Hybrid Work Specialist

The Shift to Hybrid Work Drives 1E Acquisition by Carlyle

For the last sixteen months, remote work became commonplace. Now, as we hopefully emerge from the pandemic, a transition to hybrid work models appears likely – a move prioritizing productivity over mere office presence, and reducing commute times. To capitalize on this evolving landscape, 1E, a provider of solutions for hybrid work enablement and endpoint management, has been acquired by Carlyle following a period of substantial business growth.

Deal Details and Company Background

The private equity firm has secured a majority stake in the London-based company for a valuation of $270 million.

CEO and co-founder Sumir Karayi will retain a significant minority ownership position, alongside the company’s employees. Notably, 1E is entirely bootstrapped, having achieved profitability without prior venture capital funding, and experienced 28% growth in the past year.

A Contrasting Startup Story

The trajectory of 1E presents a compelling contrast to many enterprise startups frequently highlighted in tech publications.

Founded in 1997 by Karayi, Phil Wilcock, and Mark Blackburn, the company originated from their experiences as in-house consultants at Microsoft, assisting enterprises with Microsoft software adoption. Karayi sought to establish his own venture, diverging from a long-term career within Microsoft.

From Consultancy to Software Development

Initially operating as a consultancy, 1E quickly recognized the need for dedicated technology to address the challenges faced by its clients. This realization prompted a shift towards software development.

The company’s early focus was on endpoint technology management, providing tools to optimize computer terminals and networks. Key products included NightWatchman, a power management solution for PCs and servers; Nomad, a bandwidth management tool; and Shopping, a platform for creating internal app store-like experiences.

Evolving to Support Hybrid Environments

Even before the COVID-19 pandemic, 1E’s offerings expanded to encompass software designed for emerging hybrid working environments, anticipating the challenges these models would present.

“Remote work often presented a suboptimal experience,” Karayi explained, noting that technical support, software access, network connectivity, and device troubleshooting were considerably more difficult for remote employees. 1E, named after a common PC error message (“STOP 0x0000001E”), developed software to resolve these issues.

Patents and Enterprise Clientele

The company has amassed a portfolio of 40 patents related to its technology, which is currently deployed across over 11 million devices within 500 large enterprises. These clients include prominent organizations such as AT&T, Nestlé, and several major financial institutions.

Growth Fueled by Remote Work Demand

The surge in demand for remote work solutions has driven a particularly strong year for 1E. Businesses have been actively integrating its tools as part of broader “digital transformation” initiatives. This success prompted Karayi to consider external investment to accelerate the company’s growth.

He emphasized that 1E’s success was built on a dedicated team passionate about innovation and positive word-of-mouth referrals.

Future Plans with Carlyle

“We are experiencing a fundamental shift, and we believe 1E is well-positioned to capitalize on this opportunity,” Karayi stated, suggesting that the current adoption of remote work is merely the beginning. “I believe the traditional office model is becoming obsolete.”

Carlyle was selected from multiple bidders due to their strong understanding of the business and established reputation. The anticipated strategy aligns with a typical private equity model: four years of accelerated growth, with all future options remaining open.

Carlyle’s Perspective

Fernando Chueca, a managing director at Carlyle Europe Technology Partners (CETP), commented, “We were attracted to 1E’s comprehensive digital experience technology, distinguished by its advanced remediation and automation capabilities, and are pleased to collaborate with Sumir as we support the company’s next growth phase.”

He added, “With favorable industry trends, we are confident in 1E’s growth potential and look forward to supporting another founder-led business through investments in product innovation, commercial expansion, and international reach.”