Customer suggestion led to Verelo’s last-minute acquisition

After announcing it would scrub its Web site monitoring business at the end of last year, Toronto-based Verelo Inc. has been acquired by Manchester, N.H.-based Dyn.

Dyn, which also offers Web infrastructure services in the form of managed DNS, traffic distribution, e-mail delivery and e-mail reporting, announced yesterday that it had acquired Verelo’s assets and will continue to offer the service for free of charge. But the deal may never have taken place if not for the co-founder and CEO of Lockify.com, Jack Templin.

Templin, who is in the startup beta phase himself with a service that encrypts text and securely shares it via a URL, is a mutual customer of both Dyn and Verelo. When he got notice that Verelo was going out of business, he e-mailed Dyn’s CEO and said it was a too bad a company like Dyn couldn’t have acquired the service and keep it going. It turns out Dyn’s CEO thought that was a good idea.

Verelo’s pitch at Extreme Startups demo day.

Dyn reached out to Andrew McGrath, Verelo’s co-founder and CEO, and voiced their interest. McGrath was looking for a buyer so he could repay back his investors. The financial terms of the deal haven’t been confirmed, but Kyle York, chief revenue officer at Dyn describes it as a small deal.

“He was able to return the investors’ money, which I know was important to him,” York says. “All remaining users of Verelo will be grandfathered in.”

Even premium, paying users of Verelo will now get the service for free. But Dyn is still sorting out what level of service will be offered. The Web site performance monitoring and downtime alert service was previously selling packages that offered more frequent check-ups for more money. Currently, an “enterprise” plan is being advertised for free on Verelo’s Web site, supporting 71 checks for up to 12 users per month with a malware scanner and unlimited notifications.

The service’s brand will likely continue to be called Verelo powered by Dyn, York says. Dyn has 4 million active users worldwide, using its free DynDNS tool which provides a static IP address for remote access purposes. It supports those users by selling services such as domain registration, authoritative DNS services, e-mail forwarding, etc.

“Our main benefit is we’re a 200 person company,” York says. “With that comes the revenue to support those employees and expenses.”

York says Dyn has been profitable since it opened its doors in 2001, and received a $38 million funding round last year. Dyn is considering hiring a couple of Verelo’s employees on as well.

Source | Dyn

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