IVCA Profile: Venture Capital Portfolio Company of the Year at the upcoming 2023 IVCA Awards Dinner is Nerdio

November 29, 2023

It’s that time of year, to reflect back upon the many successes and honor those who have worked toward that success. Kirkland & Ellis LLP will present the annual IVCA Awards Dinner, taking place on Monday, December 4th, 2023, starting at 5:30pm at the Four Seasons in Chicago. The honors conferred will be the Private Equity Portfolio Company of the Year, the Richard J. Daley Award and the Venture Capital Portfolio Company of the Year.

The Venture Portfolio Company of the Year is Nerdio, and the honor will be presented to Vadim Vladimirskiy, the company’s Founder and CEO, by Bret Maxwell, the Managing General Partner of the company’s Venture Capital investor MK Capital.

Nerdio is a premier software solution provider, supporting organizations of all sizes looking to deploy, manage, and cost-optimize native Microsoft technologies. They partner with Managed Service Providers (MSPs) and enterprise organizations all over the world to add value on top of their existing Microsoft investments like Azure Virtual Desktop, Windows 365, and Microsoft Intune. MK Capital was an A-Round investor.

The IVCA recently interviewed both Bret Maxwell and Vadim Vladimirskiy on the particulars of the investment and the success of Nerdio

IVCA: Bret, What made Nerdio the perfect fit for your investment philosophy of MK Capital, at the point you first came in?

Bret Maxwell: We first partnered with Vadim in 2014 when we invested in ADAR, which Vadim started in 2005, nearly a decade before. ADAR ‘checked all of the boxes’ for MK Capital, including first his origins as a ‘Bootstrap Entrepreneur,’ second having more than $1M of annual recurring revenue at the time of our initial investment, third being very capital efficient and fourth having a very satisfied and happy customer base … we knew several ADAR customers and the customer references as ‘glowing.’

As Vadim details below, we sold ADAR in January 2020 and reinvested a portion of those proceeds in Nerdio along with the management team.

IVCA: Vadim, what is the origin of Nerdio, and how did you break out of MSP you were part of, and what was involved?

Vadim Vladimirskiy: Nerdio was created as a software platform within a Chicago-based MSP, which I started, to help improve the efficiency of that business. The Nerdio platform allowed ADAR… the MSP … to be more efficient in deploying customers’ cloud IT environments and manage them in an automated fashion. This led the business to be very profitable and grow rapidly and consistently.

Other MSPs approached us to license the platform and the idea of making Nerdio a standalone product was born. Once launched as a public cloud management platform for MSPs, we immediately recognized the tremendous market potential this technology had. This led to the decision to spin out Nerdio as a standalone company and sell the MSP to help fund Nerdio’s growth. ADAR was sold to private equity in January 2020 and Nerdio was officially born as a standalone company the same month. Nerdio started out with the first product that was offering an automation platform to MSPs to build successful cloud practices in Microsoft Azure.  

Shortly after starting the company we recognized an opportunity to offer similar technology directly to large enterprise customers who needed help automating the deployment, management, and optimization of virtual desktops in Azure. As a result, our second product designed for enterprise customers was launched in March 2020 the week when every business sent employees to work from home as a result of COVID lockdowns and needed a solution to quickly implement a work-from-home IT strategy enabled by desktop virtualization in the cloud.

IVCA: Bret, when the firm is strategizing after making a decision to invest, what metrics do you use as far as how deep your influence will go, beyond signing the check?

Maxwell: The metrics we look at are the ones noted above, along with being able to influence management on decision-making going forward. And our ability to influence those decisions needs to be based on the quality of our business logic and our relationship with management rather than controlling the company. 

In almost all instances, we lead our investments, structure the term sheets, do our own due diligence and serve on the company board. And then work actively to grow and develop the business post investment.  We partner with management and are NOT passive investors. 

IVCA: Vadim, as your value-added capabilities you offer are Microsoft based, what is the process of partnering with them as you develop your technology?

Vladimirskiy: Our partnership with Microsoft engineering started back in 2018 while they were building their first Desktop-as-a-Service offering called Windows Virtual Desktop (WVD), which launched in Q4 of 2019. At that time, Nerdio had an automation platform for deploying and managing the then-current desktop virtualization technology called RDS. Microsoft approached us to incorporate WVD into our platform and that’s how the partnership started. Later that year a 23-year veteran of Microsoft, Joseph Landes, joined me as CRO and has greatly increased visibility and awareness of Nerdio within Microsoft.

Since then we have continued working closely with Microsoft across many areas of the company including engineering, field sales, marketing, SMB, and others. Nerdio was a launch partner for Microsoft’s WVD product – later renamed to Azure Virtual Desktop – and Windows 365 Cloud PC product in 2021. Nerdio’s product team cooperates closely with Microsoft’s product team on new feature development and helps enhance the value of Microsoft products by staying close to customers’ needs and quickly solving these needs with our software. Nerdio makes Microsoft services easier and quicker to adopt for both MSPs and IT professionals and optimizes the use of Microsoft Azure to help customers reduce costs by 50%-75% on average.

IVCA: What is the philosophy behind the building of the Nerdio team, and how has your environment for that team contributed to your success?

Vladimirskiy: Nerdio was born shortly before COVID and grew rapidly during the pandemic. As a result, we built a fully virtual team that spans 24 states and 15 countries. Nerdio works at high pace and provides employees with clear objectives and lots of independence. We call our culture ‘drivers’ rather than passengers. Additionally, Nerdio is also proud to have a ‘learn it all’ rather than ‘know it all’ in its culture, which allows us to encourage experimentation, make mistakes quickly, and find what works.

IVCA: As you recently secured ‘B Round’ funding, how will this evolve the enterprise, and what are you anticipating for 2024 and beyond?

Vladimirskiy: Our B-Round funding has allowed us to expand product development, both accelerating current products and building new ones. It has also allowed us to expand geographically to create teams in regions where we saw strong demand for our technology. In 2024, we intend to continue growing rapidly by expanding both our go-to-market capabilities and products.

IVCA: Bret, As an A-Round investor, how will you maintain a presence on the Board of Directors as Nerdio grows and seeks additional funding?

Maxwell: We continue to be very active with Nerdio and its management team, retain a major ownership stake in the business and continue to serve on the Board of Directors post the Series B closing. 

IVCA: Finally Vadim, as the 2023 recipient of the Venture Capital Portfolio Company of the Year, what does it mean to you personally to be recognized by the IVCA and your peers in the Venture Capital industry?

Vladimirskiy: It is very humbling for me to be accepting this award on behalf of Nerdio. I’ve been an entrepreneur for more than 20 years, starting with my first business venture while still in high school. In 2013 I met Bret Maxwell from MK Capital and was introduced to the world of Venture Capital. I was honored back then when MK Capital recognized the potential of what we were building and decided to partner with me.  

For the past 10 years I’ve been very much ‘head down’ building the technology and the business. It is hard for me to believe the scale that we’ve been able to achieve over the past few years and the opportunity that is still ahead of us. Being recognized by the Venture Capital industry is an honor and validation of the hard work that the Nerdio team has put in to make it this far.

Kirkand & Ellis LLP presents the 2023 IVCA Annual Awards Dinner on December 4th, 2023, at the Four Seasons Hotel in Chicago. For info and updates, click here.