Making a long-anticipated move, Datto Inc. mounted an initial public offering Wednesday.
Founded by Rochester Institute of Technology graduate Austin McChord in 2007, the Norwalk, Conn.-based software company employs 200 in the Rochester area.
Datto planned the IPO to raise $549 million. After spiking to a high of $32.36 in their first day of trading, Datto shares (NYSE: MSP) closed 10 cents above the IPO’s target price at $27.10. The IPO raised some $550 million before the day was done, Barron’s reported mid-afternoon Wednesday.
After building Datto from a one-person startup that grew out of work he did as an RIT student to a company then valued at $1 billion, McChord resigned as the firm’s CEO in October 2018. He remains on Datto’s board and holds more than 5 percent of its stock, making him one of Datto’s biggest shareholders.
McChord transitioned out as Datto’s chief executive in October 2017 approximately a year after Vista Equity Partners’ 2017 acquisition of Datto. In the acquisition, Vista simultaneously merged Datto and Autotask, an IT firm Vista had acquired in 2014. In 2017, McChord donated $50 million to RIT, the largest gift the school has ever seen.
Current Datto CEO Tim Weller, in a letter included with the firm’s Securities and Exchange Commission IPO registration form, gave McChord a shout out, writing: “On behalf of our more than 1,600 employees, thank you for founding Datto over a decade ago. You built a rare, honest culture of disruptive technology creators.”
Datto’s main lines of business are providing cloud services and developing software for managed service providers. Known as MSPs, such firms provide outsourced IT services to businesses, largely to small and midsize firms.
In 2019, Datto lost $31.2 million on revenues of $458.8 million. In the first half of this year, it posted revenues of $249.1 million and earnings of $10.1 million profit.
In an interview with the Rochester Beacon Wednesday, McChord compared seeing the company he had nurtured from its infancy go public to “what it must be like for a parent to see a child they’d raised graduate from college, to see that they’ve grown so far beyond what they were.”
McChord, who is based in the Boston, Mass., area, took the reins earlier this year of Henrietta-based Heart Health Intelligence. Headquartered at RIT Venture Creations, HHI is developing a medical-grade smart toilet seat capable of sending accurate readings of cardiac vital signs to cardiologists and other heart specialists. HHI will grow to be as larger or larger than Datto, McChord predicted earlier this year.
Will Astor is Rochester Beacon senior writer.