What's the fastest way for a tech business to get customers?
For startup Sparxent Inc. the answer is, quite literally, to acquire them. The Salt Lake City, Utah, provider of IT services to the mid-market, which launches today with an undisclosed amount of backing from vSpring Capital, has just two employees at the moment, but will rapidly add more as it brings newly-acquired companies under its belt.
In fact, on the same day that it announces its launch, Sparxent is also announcing its first two deals. The company said it has acquired value-added reseller NetworkD Corp. and has signed a letter of intent to buy Russian IT services provider Arbyte Group.
"We will be acquiring quite a few more services," says co-founder and chief marketing officer Dave Taylor, who describes Sparxent's long-term goal of building an IT services provider that would do for smaller businesses what IT consultants such as Accenture Ltd [ACN] or IBM Corp.'s [IBM] Global Services division offer the world's largest enterprises.
Taylor says that he and co-founder Steve DeWindt initially came up with the idea for Sparxent when they saw that the mid-market was underserved by IT services and consulting providers, but quickly realized that it could be challenging to connect with end users because of the complex nature of the value-added reseller, or VAR, arrangement, in which tech companies use middlemen to sell their products.
That was when they decided to buy their way into the market. The VARs we acquire will give us reach into tens of thousands of midsize companies," says Taylor. Although the company did not disclose the price it paid for its first two acquisitions, Taylor said that the VC money it has raised to date will enable it to buy "well over" $100 million of revenue. But that is just the start.
"We'll be on the market for more capital," he says. -- Andrea Orr
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