Electric Raises $90 Million Series D to Empower SMBs

Electric Secures $90 Million in Series D Funding

Electric, a provider of IT infrastructure software tailored for small and medium-sized businesses (SMBs), has experienced significant momentum recently.

The company announced the completion of a $90 million Series D financing round today. GGV Capital, a pre-existing investor, spearheaded the investment, with further participation from Bessemer Venture Partners, Primary Venture Partners, Greenspring Associates, 01 Advisors, Atreides Management, Vintage Investment Partners, and Slack – all existing stakeholders.

Simplifying IT Infrastructure for SMBs

Electric’s role in IT infrastructure mirrors the function of Justworks within the realm of Human Resources. Rather than SMBs needing to employ dedicated personnel or departments to manage fundamental IT tasks – a substantial portion of which involves upkeep and adherence to regulations – Electric’s software streamlines the processes of deployment, maintenance, and security for organizations.

Prior to Electric’s emergence, SMBs faced a choice between establishing an internal IT department or outsourcing to a local IT service provider. Electric introduced a solution enabling a company administrator to ensure all devices remain current, secure, and compliant, alongside the ability to provision new hardware and revoke access privileges.

Growth Fueled by Remote Work Trends

The rise of remote work, particularly accelerated by the COVID-19 pandemic, has amplified the demand for solutions like Electric, as evidenced by the startup’s performance metrics.

The company reported over 100% revenue growth in 2020. Notably, Electric established ambitious growth objectives for that year and surpassed them all, despite a two-month period at the onset of lockdowns where no sales were recorded. (The rapid digital transformation experienced by many businesses created a favorable market for their offerings.)

This success facilitated the closing of the company’s Series C funding round in February, at which point Electric had achieved nearly $20 million in Annual Recurring Revenue (ARR) and served 400 customers. Continued expansion throughout the current year has resulted in a customer base of 700, encompassing 40,000 end users and a 111% increase in ARR.

Preparing for a Potential IPO

The positive trajectory attracted further investor interest, prompting CEO Ryan Denehy to consider the company’s long-term prospects.

“We began to recognize the potential to double the business again in the coming year, and likely repeat that growth the year after, potentially positioning us for a public offering within two to three years,” stated Denehy. “Realizing this opportunity, however, requires additional capital to adequately prepare our team, product, and overall infrastructure for a pre-IPO phase.”

Currently, the company is projecting an ARR of just under $40 million for 2021.

Maintaining Focus Amidst Rapid Scaling

As is common with rapidly expanding Software-as-a-Service (SaaS) companies, maintaining focus presents a significant challenge.

“We aren’t subject to the same intense competitive pressures as many other B2B SaaS businesses, and our operations are inherently complex,” explained Denehy. “Consequently, numerous economically attractive opportunities arise daily, offering the potential to quickly launch new revenue streams. However, we must also acknowledge that the absence of venture-backed direct competitors stems from the inherent difficulty of solving this problem. Diversifying our efforts too broadly risks compromising the quality of our core offerings and potentially derailing our progress.”