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UCaaS investment: NEC supports postponed intermedia IPO

NEC plans to invest US $ 40 million in Intermedia as part of a postponed initial public offering. The anticipated investment is part of NEC’s expanded global partnership with Intermedia focused on Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS).

Intermedia (proposed stock symbol: $ INTM) planned to go public in  -ril 2021. However, the IPO was delayed amid the turmoil on Wall Street, Intermedia said at the time. Still, ChannelE2E believes the delay actually included a lukewarm investor interest in the UCaaS company.

Fast forward to September 2021 and Intermedia revived the IPO plan – this time with a goal of raising $ 100 million, down from an earlier target of $ 300 million, Renaissance C -ital noted.

Development of the intermedia business: from email security and data protection to UCaaS

In the early years, Intermedia was best known as a hosted exchange service provider. But as Microsoft Office 365 and various cloud storage companies gained momentum, Intermedia swung into the UCaaS market.

According to an SEC filing from October 2021, Intermedia’s business and financial metrics show the development of the business and revenue mix. The metrics to be considered:

  • revenue of $ 251.6 million for the fiscal year ended December 31, 2020 and $ 133.8 million for the six months ended June 30, 2021.
  • Grow – UCaaS solutions increased Annual Recurring Revenue (ARR) by 31.5% for the 12 month period ended June 30, 2021 and contributed 35.4% and 39.4% of our total FER as of December 31, 2020 and June 30, 2021, respectively at.
  • Shrinking – ARR from the BCA product group, which includes cloud-based email solutions, email protection, archiving and encryption services, file backup and collaboration solutions, productivity services, and other services including SIP trunking, went around in the 12-month period ended June 30, 2021 5.7% back and carried 65. at% or 61% of our total FER as of December 31, 2020 and June 30, 2021.
  • Annual deficit as of December 31, 2020 was $ 21.7 million. Additionally, the net loss for the six months ended June 30, 2021 was $ 13.7 million.
  • Channel partnerships comprise more than 7,000 companies.

Installed base from NEC: a great opportunity for intermedia?

Meanwhile, NEC has committed to working with Intermedia until at least  -ril 2030. The commitment is five years longer than the original NEC-Intermedia relationship plan. In addition, the expanded agreement makes NEC the exclusive reseller of Intermedia UCaaS and CCaaS solutions in J -an.

According to Intermedia’s SEC filing of October 2021, NEC and its partner network can target an estimated installed base of  -proximately 80 million local NEC business phone users.

In a prepared statement on the relationship, Ram Menghani, President of NEC Enterprise Communication Technology said:

“The extension of this critical, strategic partnership and our long-term commitment to the future of Intermedia reflect the success of both companies to date. It also shows our confidence in the innovative and focused  -proach of Intermedia in developing and delivering the cloud solutions that companies want and partners want to sell. Intermedia has proven to be the excellent partner we envisioned. From their highly talented and inventive engineering and product development teams who developed the UNIVERGE BLUE product suite that now includes CONNECT BRIDGE, to their powerful partner platform that allows resellers to mark Intermedia products as their own, to their comprehensive one Sales, marketing and technical support that is unparalleled on the market. “

UCaaS mergers, acquisitions, and private equity investments

Meanwhile, M&A activity and investments in the UCaaS market remain stable. Among the recent moves to watch out for, RingCentral acquired certain technologies from Mitel and the two companies entered into a UCaaS partnership. You can find more UCaaS M&A and investment deals here.

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