Fast-growing tech companies typically aren’t known for their prudence—the motto “move fast and break things” comes to mind.
But one tech company is experiencing hypergrowth while taking a different approach. IT software provider Kaseya—which is poised to become the nation’s sixth-largest software company by 2030, its CFO, Kathy Wagner, told CFO Brew—is staying profitable while pursuing growth through carefully considered acquisitions and thoughtful talent management.
“The one thing I say about being in a hypergrowth mode is it’s not a top-line game,” Wagner said. “We need to grow profitably.”
About Kaseya: Kaseya, founded in 2000, had revenues of $1.58 billion in 2023. It’s headquartered in Miami, with offices in more than 21 other countries, and employs more than 4,500 people. The company makes IT software for small and midsize businesses and managed service providers. Its signature product, IT Complete, is an integrated suite of IT applications, covering such functions as service desk, network management, compliance backup, and security.
The “secret sauce” behind Kaseya’s growth: IT Complete is tailored to the “multifunctional IT professional,” Wagner said, “the person who is backing up a dentist’s records and answering the phone because the guy at the restaurant can’t get into his computer.” The software is designed to make it easy for such customers to toggle between applications—all of which are integrated with one another, without having to switch between different platforms.
Kaseya acquires companies that produce solutions that are a good fit for its customer base, and that will add value to its current platform. For instance, it recently acquired Vonahi Security, a maker of penetration testing software. Penetration testing, Wagner said, can be labor intensive and too costly for some small businesses to afford. The software automates penetration testing, putting it within reach of more of Kaseya’s customers.
“We [ask] ‘Does it make IT Complete more complete?’” when evaluating potential acquisitions, Wagner said. “Integrations are the secret sauce of our platform.”
As Wagner noted, choosing the right companies to acquire has contributed to its growth strategy. “We’ve successfully made every acquired module more affordable than they were prior to the acquisition,” she told CFO Brew in a follow-up email, “and seen worthwhile returns on our investments.”
Carefully considered growth: When companies are in a growth phase, Wagner said, they may fall into a habit of spending too freely.
Wagner prefers to operate with more restraint. “I always take a consultative approach. ‘What are you trying to achieve? Is there another way to achieve it without throwing more resources at it, whether it’s money or people?’” she said. To accelerate profitable growth, “you have to be very strategic in how you allocate resources,” she said.
News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.
That mindful approach, she said, is one reason Kaseya, unlike many tech companies, was able to avoid widespread layoffs last year. “We have a lot of restraint in that we didn’t overhire over the pandemic,” she said. In turn, not being known for layoffs has helped Kaseya attract employees: “You’re not going to see anything like that in Kaseya’s history,” she said. “We have a much more stable environment to offer the workforce.”
Leaning in…to the office: Which brings up another way Kaseya differs from many tech companies: The majority of its employees work on site. (In fact, Kaseya is leaning into physical offices at the same time other companies are leaning out; it’s begun expanding one of its four Miami offices to accommodate more than 400 people.) That choice hasn’t hurt it in terms of recruitment, Wagner said; in fact, its CEO has set an ambitious goal of hiring 3,000 people in the next few years.
The choice to have staff work on site complements Kaseya’s “grow-your-own” approach to developing leadership, Wagner said. On-site connections allow for “learning and mentorship and collaboration,” she said, which is especially important for early-career staff. Sales employees, she said, benefit from having solutions engineers “within arm’s reach” in case customers or leads have questions.
“Our investment in Kaseya’s talent is absolutely a huge driver of our growth,” she said.
And working on site makes her and other members of the C-suite feel more approachable, Wagner said. “I came in the other morning and there were three people standing in front of my office and they wanted to talk to me about deals they were doing,” she said. “You’re not going to get that when you’re at home and have to call the CFO on Zoom.”
Such in-person interaction can increase CFOs’ own understanding of the business, Wagner said.
“Understand how decisions get operationalized. Go spend time with people that are two and three levels below [your] peer group,” she advises CFOs. “Understand where the real needs are versus the wants. That’s only going to make you smarter about the business and more strategic when you’re making decisions about business allocation.”