Nerdio receives $117 million to build management tools on top of Azure Virtual Desktop

In 2005, three entrepreneurs – Vadim Vladimirsky, Stuart Gable and Niall Keegan – co-founded Adar, a Chicago-based company providing “streaming IT” and IT-as-a-service products primarily to small and medium-sized businesses. A little more than a decade later, Adar created an internal division, Nerdyfocused on helping other managed service providers move their customers to the cloud.

Recognizing an opportunity for further growth, Vladimirskiy and Nerdio’s co-founder, former Microsoft executive Joseph Landes, decided to spin off Nerdio as a separate company and sell Adar to a private equity firm in January 2020. They contributed significantly to the first round of funding on Nerdio in February of that year, which turned out to be a wise bet. Nerdio today closed a $117 million Series B round led by Updata Partners, bringing the company’s total raised to $125 million.

Vladimirsky, speaking to TechCrunch via email, said the proceeds will go towards Nerdio’s customer acquisition, product R&D and hiring efforts. “The market timing for this investment is perfect,” he added. “As many businesses emerge from the pandemic with a new affinity for hybrid and remote working, modern technologies that can best deliver secure and efficient delivery and management of digital workspaces are in high demand.”

Nerdio’s platform enables customers to deploy, manage and cost-optimize virtual desktops running on Microsoft Azure, extending the capabilities of Azure Virtual Desktop, Microsoft’s cloud system for virtualizing Windows. With auto-scaling, “license optimization,” security and compliance, and monitoring and reporting features beyond what Microsoft offers natively, Vladimirskiy claims Nerdio can deliver significant cost savings while “non-destructively” layering on top of existing Azure Virtual Desktop deployments. (Nerdio runs in the customer’s own Azure subscription as an Azure-based application.)

“With Nerdio, any deployment or management task in Azure Virtual Desktop can be done with a few clicks and by any level of IT staff,” Vladimirski said. “With powerful policy and access control features and RBAC roles, we provide a safety net for organizations using next-generation IT to fully understand the power and value of Azure without getting lost in its complexity.”

Vladimirski said business really took off during the pandemic, as businesses affected by pandemic-related shutdowns and the subsequent shift to hybrid and remote work began exploring virtual desktop solutions for their workforces. The survey data illustrates the dramatic change. And 2020 survey from TrustRadius, the business technology review site, found that over 50% of businesses expect to increase their spending on remote desktop software over the next year.

Between February 2020 and this month, Nerdio saw an astonishing 2,000% increase in annual recurring revenue, according to Vladimirskiy, and now has more than 5,000 customers, including managed service providers and system integrators. Meanwhile, Nerdio’s group of partners has grown to more than 1,000.

“[During the pandemic,] everyone, all at once, needed to find solutions that allowed their workforce to continue to work and do so safely from their homes. As such, both service provider management and enterprise adoption have been significant,” Vladimirski said. “We have been able to maintain capital efficiency and ensure we are poised for success, even during times of economic uncertainty.”

It probably helps that Nerdio has a close working relationship with Microsoft. The startup has a number of Microsoft veterans on its board of directors, including Gavriella Schuster, Microsoft’s former head of global partners, and is regularly trait in the tech giant’s marketing materials.

It also helps that Azure Virtual Desktop is catching on quickly, despite competition from established companies like VMware and Citrix. At the beginning of 2022 research by eG Innovations and AVD TechFest of around 500 organizations found that 58% intend to launch Azure Virtual Desktop installations within two years. The study suggests that Azure Virtual Desktop is finding a niche with small businesses that typically wouldn’t consider Citrix or VMware due to cost or other constraints.

“In the managed service provider space, we really don’t see anyone else providing managed service providers with the customized capabilities that we do in terms of cost and time management and scalability,” Vladimirski said. “Not only do we make Azure and its virtual desktop services palatable in terms of time and resources—with Nerdio, any deployment or management task in Azure Virtual Desktop can be done with a few clicks and by any level of IT staff—but we we address perhaps the biggest barrier to adoption of these indigenous technologies, which is cost.

Nerdio, based in Skokie, Illinois, currently has a team of 100 people that it plans to roughly double in the next year.

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