Datto Unveils New Investment Round, Discusses Tie To Hillary Clinton's Email Server

Datto's Austin McChord

Hybrid cloud data protection technology developer Datto on Tuesday unveiled a new round of funding it said will be used to expand the company's reach rather than for funding operations.

Datto's new B round of funding, which totals $75 million, comes from a single investor, and brings the total investment in Datto to just over $100 million, said Austin McChord, founder and CEO of the Norwalk, Conn.-based company.

Datto is already a profitable business, and expects to continue to be profitable, McChord told CRN.

[Related: Datto Acquires Backupify, Adds SaaS-Focused Data Protection]

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"That's why we don't need so much capital," he said. "The first outside investment in Datto was two years ago. Before that, we ran six years without it. ... We don't need to fund our operations. We can use the investment to expand our geographical reach and to improve our technology without impacting operations."

Improving Datto's technology could include acquisitions, McChord said. Datto in December acquired Backupify, a Software-as-a-Service-focused data protection vendor.

McChord said he doesn't think Datto is missing any technology that would require an acquisition. "But there are areas where we could see dramatic improvements," he said.

Datto's most recent mention in the news stemmed from reports in October that the company was used as a disaster recovery site for the server on which presidential candidate and former Secretary of State Hillary Clinton kept her personal email account, over which, it has been alleged, she sent classified documents.

McChord said Datto indeed served as the backup partner for the reseller who worked with Clinton and her email account.

"It wasn't a typical customer for us," McChord said. "We care tremendously about the privacy of our customers and our partners. We are cooperating in the investigation. We handed relevant information to the FBI, which is performing the investigation."

Datto's sales model is focused exclusively on the channel, particularly via managed services partners, McChord said. "We think we have one of the largest active sets of MSPs, numbering in the thousands," he said.

It is important that Datto continues to innovate, and the new funding should help, said Jim Turner, president and founder of Hilltop Consultants, a Washington, D.C.-based MSP.

Turner, who described himself as a big fan of Datto, told CRN that his company will not take on a client without providing disaster recovery and business continuity, and that Datto is his solution of choice.

"I'm impressed with Datto's recent innovations, including its new DNA router that fails over clients to 4G wireless in case normal Internet connections are unavailable," he said. "A lot of small businesses don't have redundant networks. They often don't have multiple IP connections, or find them too expensive."

Data protection in Microsoft-hosted Exchange environments is difficult, and Datto's Backupify has gone a long way in providing a good alternative, Turner said. "I'm happy Datto's innovating and developing for the channel," he said. "And I'm looking forward to see what they come up with next."

Datto owns its own 160-petabyte cloud on which its data backup, recovery and business continuity services are provided, McChord said.

"We're operating on a similar scale as the biggest cloud providers," he said. "At 160 petabytes, we're buying hard drives by the pallet. Our costs are no more than those of Amazon or Microsoft Azure.