‘Scuse Me While I Kick the Sky
To our Valued Investors:
For centuries, and at a much-accelerated pace over recent decades, efficient data management has been a critical factor contributing to the success or failure of a business. What was once stored in a thick, dusty ledger, then in rooms filled with filing boxes containing typewritten tables and graphs, then on CD-ROMs and hard drives, is now most effectively stashed away in what we call “the cloud”. Cloud computing providers own and operate high levels of data storage capacity and deliver the client’s information, on a pay-per-use basis, through the internet. Their value lies mostly within how they can protect this priceless commodity from accidental loss and theft by nefarious hackers. While an accounting ledger can be misplaced, a careless pencil pusher can burn down the file room with a half-extinguished cigarette, or a well-intentioned but dimwitted child can erase your CD by sticking it to the fridge with a magnet, cloud storage providers sell peace of mind. Think of it like a physical storage unit that safeguards all of your business’s most important records and can deliver them to your desktop (or to any authorized co-worker) in the blink of an eye. Most importantly, a good storage provider can reliably and efficiently migrate data to the cloud, maintain it in an accessible and easy-to-use fashion, and faithfully protect it from falling into the hands of the wrong people. It is this triple-faceted role of mechanic, housekeeper, and bodyguard for which IT clients shell out the big bucks.
This is likely not the very first time you are learning about this technology. The concept is thought to have come about as early as the 1960’s, and was offered in small doses to consumers in the 1980’s (remember CompuServe?), and it truly kicked into gear in the 1990’s. Today, with numerous providers and millions of users of all sizes, cloud storage has a market of about a half a trillion dollars. With so much demand at the forefront, and presumably much more that has yet to be tapped, what we’re really looking at is an information age gold rush.
Headquartered in Seattle, Washington, SkyKick, Inc. is panning for this gold in a big way. Clearly, they are not the only company in the game. Their business model, though, positions SkyKick to scoop up more than its share of those shiny nuggets. To segue to a different metaphor, SkyKick is taking shots at a larger goal. One might intuit that the biggest paydays and the greatest demand might be found within the largest enterprises, but SkyKick has most of its focus on small-to-medium-sized businesses (SMBs). Put another way, Walmart, Target, and Home Depot are very big fish, but capturing the IT dollars of the innumerable smaller retailers around the globe can yield much more impressive results. The SMB market has dramatically less competition than the large enterprises, giving SkyKick more liberal access to a very target-rich environment. Add to this the fact that the behemoths have most of their data needs sorted out with established processes, while the SMBs are still in the early stages of developing these protocols. SkyKick stands ready to guide the smaller businesses toward the cloud proficiency they might not yet even realize they require.
This is not an exercise in speculation about what SkyKick might someday be able to achieve. Presently, over 20,000 IT partners in more than 125 countries are accelerating their cloud business with SkyKick. They are quite actively operating a thriving business. Companies are scaling their cloud business with streamlined migrations that routinely satisfy customers, reduce risk, and save time. Among others, SkyKick caters to the Internet Telephony Service Provider (ITSP) market. Those services that let you make free long-distance calls over the internet need cloud storage, and this industry controls over $1 trillion of IT spending. SkyKick is pulling in more than their share of the business that’s up for grabs, thanks in large part to their excellent reputation. IT Partners rated SkyKick #1 among Office 365 migration vendors across the categories deemed most important including partner profitability, risk reduction, ease of use and overall data quality.
In the last twelve months, the global health crisis has rattled many businesses. Restaurants have been shuttered, casinos have taken a massive hit, and the travel industry is on its heels. Such unexpected circumstances understandably create an elevated level of caution among prospective investors. People are driven to seek out recession-proof opportunities. Since the beginning of the covid-19 pandemic, SkyKick’s data protection (its main product) has grown 50%. With legions of SMB employees forced to “shelter in place” and work from home, the need for secure and reliable cloud storage has increased. When the world returns to some level of normalcy, that wonderful genie is very unlikely to go back into the bottle. The evolved perception of optimal data management will not reverse course and regress into simpler times. SkyKick stands to retain and build upon these revenue streams for the foreseeable future.
At Iron Edge VC, we pride ourselves on our ability to uncover the less obvious investment opportunities that haven’t yet been inflated by popular demand. We always notice when a “hot name” is being chased by voracious buyers, and the private shareholders raise their offers as they sense the urgency. Usually, while this is going on, a similar play with a much more attractive valuation quietly waits for some attention. Today is no different, and once again we see this concept on full display. Rubrik, Inc. is a high-profile cloud storage provider, and all of the most plugged-in pre-IPO participants want a piece of this one. Understanding the vast potential in the space, we fully understand the interest in Rubrik. Still, it is instructive to know that Rubrik’s domain is in larger enterprise. They operate in a much more competitive field than SkyKick’s SMB market, and in this regard Rubrik is not truly and directly comparable to SkyKick. What’s more, Rubrikmania has driven that company’s share price up by about 50% in the second market this quarter. This is a strong reason to step away from the fray and take a long look into that part of the stream where the gold might be better concealed.
SkyKick is privately held, and as such its shares cannot be purchased at the stock exchange. Iron Edge VC can, nonetheless, provide you with access to our fund that holds shares of this company of the future. If you would like to learn more, or if you know anybody else who would, please don’t hesitate to contact us by clicking “Get in Touch” below.
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As always, shares are available on a first come, first served basis.
Paul Maguire, Managing Partner
The Iron Edge Team