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April 27, 2021
Upstack, fresh off announcing a $50 million private equity investment, has acquired its first telecom consultancy.
The New York-based company is buying Cloudnexion, a Colorado-based agency. Cloudnexion CEO Jake Cummins now holds the title of Upstack partner and managing director. Cloudnexion will operate as an Upstack company for the time being, according to a spokesperson.
Cloudnexion’s Jake Cummins
It’s the first of 10 agent acquisitions that Upstack plans to announce. The company is using a $50 million investment from Berkshire Partners to drive the inorganic growth. The self-described cloud and internet infrastructure platform is attracting agents with the promise of getting equity.
“When there is a larger exit event at some point in the future (at some point in the future every business at eventually exits), the agents that were predominantly responsible for driving the success of that business get to share in the success as well at the equity level,” CEO Christopher Trapp told us earlier this month.
Upstack’s Christopher Trapp
Cummins chose Upstack’s offer over multiple alternatives. Cloudnexion could have hired a COO who would build the company up or merge with a company that maintains a back office.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
“I explored all other options for taking my business to the next level; in fact, I was very far down the road on a merger plan when I ran into Upstack,” said Cummins. “The Upstack proposition really hit on all cylinders in terms of what the company is looking to do to transform the channel by creating the leading advisory platform in the industry.”
Trapp said he intends to create the top direct selling agency in the U.S.
Cummins’ firm brings an excellent pedigree to Upstack. The nine-year-old telecom consultancy ranks in Intelisys‘ top 1 percent, according to Upstack. In addition, Cloudnexion won “Partner of the Year” from Advantix, Aryaka and Telstra.
“We are thrilled to welcome Jake and the Cloudnexion team to the Upstack family,” Trapp said. “Jake has built one of the top-producing technology consulting firms in the industry over the past eight years. We’re excited to see how we can scale and grow the business together as part of the Upstack platform.”
Upstack brings a data center and colocation emphasis to the channel, as Trapp previously worked on the data center supplier side. The company generates approximately 38% of its residual revenue from colocation. Upstack will mediate opportunities between its purchased agencies who hold expertise in data center and those who don’t.
Most recently, Upstack announced the hire of former Telarus and Zayo executive Scott Forbush.
Read more about:Agents
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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