William Blair Private Company Spotlight: Ascend Technologies

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July 20, 2020 William Blair – Equity Research Technology, Media and Communications
Providing Technology to Drive Business Growth Our Q&A With Wayne Kiphart, CEO
Discuss the sequence of events that led to the founding of Ascend and what problem is the company aiming to solve? Ascend Technologies was formed through the carve-out of the managed services division of West Monroe and the subsequent acquisition of cybersecurity services provider Gratia, Inc. in March 2020. West Monroe, a U.S.-based business and technology consulting firm, blends industry expertise with deep operational and technology capabilities to create quantifiable, financial value for its clients. West Monroe had originally established a managed services division to provide IT support services for its consulting customers. M/C Partners engaged with West Monroe in a discussion around divesting the managed services business 18 months ago—both groups acknowledge the growth potential of the business and need for increased investments to improve development of the managed services, Salesforce application management, and cybersecurity services businesses. Simultaneously, M/C Partners engaged with Gratia regarding an acquisition, with me and my partner Thomas Runge taking over as CEO and COO of the combined entity. The formation of Ascend created a leading Midwest-focused platform for a comprehensive IT services provider with plans to scale the business to over $100 million in revenue.

What is your go-to-market strategy? Ascend was founded on the core belief that technology is foundational to enabling growth. Today’s most successful and adaptive organizations endure, grow, and innovate on a foundation of efficiently run core IT systems that are tailored to their specific business needs. Increasingly, organizations are relying on hybrid data centers and cloud configurations and have progressively complex data security and compliance requirements. We are passionate about helping these organizations solve their complex IT problems and provide ongoing management to enable them to focus on growing their business, while having the peace of mind that their IT services organization will fully support this growth. Ascend’s three pillars of cloud and infrastructure management, cybersecurity, and application management position us to be uniquely capable of providing end-toend customer support from the application layer to the end-user. Ascend supports a customer base across many industry verticals, with core competencies and expertise in the financial services industry, including banking, capital markets, venture capital, and private equity firms. In addition to financial services, we also support customers in the healthcare, medical device, manufacturing, and pharmaceutical industries, among others.

How do you look at the market opportunity and the market segments that Ascend is focused on, as well as the current level of market penetration? How do you expect the market to evolve? Many MSPs today are built on legacy data center and end-user support models that focus on reacting to problems rather than preventing them in the first place. Some are only now moving toward cybersecurity and application level support but often lack a comprehensive offering to provide end-to-end customer support. Ascend was formed with the capabilities and vision to address exactly that market opportunity, delivering application support and cybersecurity services today. Since its launch in March 2020 after the carveout from West Monroe, Ascend has already established itself as a leading service provider in the Greater Chicago area and plans to rapidly scale across the broader Midwest market.

What can you share about Ascend in terms of size, growth profile, and profitability? Ascend is growing quickly, both organically and through acquisitions. At its formation, Ascend lacked a sales function. We have since built out a sales team and strategy, and have seen strong bookings momentum in the first two quarters of 2020. In addition, we have identified several acquisitions that we hope to complete in the near term, and expect to approach $50 million in revenue by 2021.

What differentiates Ascend from its competitors? What do you view as the most sustainable source of differentiation looking forward? We see a few key differentiators against the broader MSP market. First, Ascend delivers a holistic view across midmarket and enterprise IT infrastructure and applications with expertise across multiple layers. Our ability to deliver customer support for the application layer, cloud infrastructure, and cybersecurity in addition to end-user support is an offering that resonates with our customers and is unique in the market. Second, we support and monitor sophisticated hybrid and cloud-based environments with a focus on cloudfirst approaches. This is a more modern approach to customer infrastructure management that supports enhanced flexibility and lower overall cost of ownership while providing customers with reliable technology support for users working in the fluid business realities organizations face today. Third, we bring a dedicated and focused approach to data security for highly regulated industries with complex compliance requirements and regulations. Combining the security expertise of West Monroe’s cybersecurity practice and Gratia’s legacy as a cybersecurity services provider, our rigorous approach to IT security is a critical differentiator in today’s technological environment. Lastly, we understand that applications are central to running a successful business. Ascend delivers business application support that goes beyond simply monitoring application environments by instituting integration across applications and customization to meet unique customer requirements.

James Breen jbreen@williamblair.com

IMPORTANT DISCLOSURES William Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report is not intended to provide personal investment advice. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. This report is available in electronic form to registered users via R*Docs™ at https://williamblairlibrary.bluematrix.com or www.williamblair.com. Please contact us at +1 800 621 0687 or consult williamblair.com/Research-and-Insights/Equity-Research/Coverage.aspx for all disclosures. Jim Breen attests that 1) all of the views expressed in this research report accurately reflect his/her personal views about any and all of the securities and companies covered by this report, and 2) no part of his/her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed by him/her in this report.

Cuba Burch Berner

Cuba Burch Berner is an Associate at M|C Partners, where he focuses on investment opportunities in digital infrastructure and technology services. Prior to joining the firm in 2022, Cuba was an Equity Research Associate at Citi covering infrastructure companies within the telecommunications industry, including data centers and wireless towers. He holds a B.S. in Mathematics with a specialization in Economics from the University of Chicago. Cuba currently lives in Boston’s West End and enjoys  a myriad of outdoor activities including running, swimming, hiking, and skiing.

Joined

2022

AFFILIATED PORTFOLIO

Contact

BOARD POSITIONS

AccentHealth

AccentHealth operates an out-of-home advertising network that reaches over 12,000 physician office waiting areas in the U.S. – JOHN WATKINS

TEAM MEMBERS

SECTOR

IT SERVICES

James F. Wade

Jim Wade co-founded M/C Partners in 1986 with Dave Croll. He has been investing in communications and technology services since the advent of wireless and broadband, cornerstones of the firm’s sector focus. As a founding managing partner, he manages the firm’s investment process, and continuously seeks out management teams, company prospects and financial resources to grow the portfolio. Jim’s successful track record includes MetroPCS (IPO), Lightower Holdings (acquired by Berkshire Partners), Triad Communications (acquired by T-Mobile), Brooks Fiber Properties (IPO and sale to AT&T Wireless), Cavalier Telephone (acquired by PAETEC), NuVox Communications (acquired by WindStream), Attenda (acquired by Darwin Private Equity), Melita (acquired by Apax Partners), PR Wireless (joint venture with Sprint affiliate in Puerto Rico), Thrive Networks (acquired/recapitalized by Court Square) and Involta (acquired by Carlyle Group). Today he serves as a director on the Board of Connectivity Wireless and has responsibility for Omega Wireless. Jim graduated from the University of Notre Dame a B.B.A in Finance and received an MBA from Harvard Business School. He lives outside Boston with his wife and four children. Jim was an avid boater and is now an average golfer.

JOINED

1986

Contact

BOARD POSITIONS
Connectivity Wireless

 

Connectivity
Wireless
Involta

Abhishek Rampuria

Abhishek (A.B.) is a Partner at M/C Partners, where he leads origination, deal diligence and portfolio company support for investments in a variety of communications and technology services segments. He currently serves on the Board of Ascend Technologies, Connectivity Wireless, Edafio Technology Partners, TowerCom and serves as a Board Observer for Thrive Networks. A.B. previously served as a Board Observer for Ensono (acquired by KKR) and QOS Networks (acquired by Zayo). Prior to joining M/C Partners in 2015, A.B. worked at Altman Solon (formerly Altman Vilandrie), a technology, media & telecommunications focused strategy consulting firm, where he completed projects for both operating companies and private equity investors. A.B. received a B.S. in Materials Science & Engineering from the Massachusetts Institute of Technology. He lives in Boston’s South End and outside of work, enjoys skiing, cycling, traveling and cheering on his home-town Patriots and Celtics.

Joined

2015

AFFILIATED PORTFOLIO

Thrive Networks

Contact

BOARD POSITIONS

Ascend Technologies
Connectivity Wireless
Edafio Technology Partners
TowerCom