St. Petersburg’s rapidly growing ecosystem for tech startups has lured another company to move its headquarters to the Sunshine City — and this time, it’s a cross-border relocation.
RabbitRun, formerly based in Toronto, is a B2B tech firm that provides software-defined wide-area network (SD-WAN) solutions that managed service providers (MSPs) resell to small businesses, particularly those that have staff working remotely or from home. Which is why, given the massive workforce shifts during the pandemic, the company is primed for explosive growth.
Operating with a team of just five, including founder and CTO Pat Saavedra and CEO Eric Hernaez, RabbitRun “has a need for 20-30 more people,” Hernaez told the Catalyst. “We plan to hire salespeople, sales support and other support [roles] all in St. Petersburg.”
Hernaez has been based in St. Pete for the past five years. He was the founder and president of SkySwitch, which was acquired by BCM One in December. He said he crossed paths with Saavedra when he was with SkySwitch and had been considering RabbitRun as a potential vendor, but Saavedra’s company was still in an early stage of development. However, the firm’s value proposition intrigued him.
“SD-WAN has been around for five or six years,” Hernaez said. “It’s mostly used by larger enterprises to tie branch offices together. With this technology, your branch offices will appear to be on the same network, even though they’re all over the country or the world.”
SD-WAN, he added, can bond multiple Internet connections together and treat them as one, so “if one of your Internet connections has a problem, it can move traffic over to another one. It’s basically just a way to treat a network more flexibly and make it easier to scale.”
When the pandemic hit, Hernaez said, it became apparent that a less expensive SD-WAN solution marketed toward small- and medium-sized businesses could find a large and potentially lucrative market.
“Almost across the board, the SD-WAN solutions out there have been designed for large companies with large companies in mind,” he said. “What RabbitRun did is the founder took this idea and said, ‘OK, home-based workers need the same kind of features, but the big solutions are just too expensive for companies to deploy in a home network.’ So the big breakthrough or invention, if you will, was that we came up with a new way of doing it that can be done more cheaply and cost-effectively and deployed for home workers.”
After reconnecting with RabbitRun following the sale of SkySwitch, Hernaez said he was “blown away” at the progress Saavedra had made: The company was able to provide a SD-WAN package, which consists of a router and a software-as-a-service (SaaS) subscription, for around $50 per month as a starting cost. Hernaez not only offered his services as CEO, but he also invested in the company, which is likely to seek additional investors early next year.
“Our go-to-market strategy is to work with MSPs and introduce it to them as another product that they can offer to their clients,” he said. “It’s kind of the same model that worked for me at SkySwitch, so it’s a lot of the same customer base we’re talking to. But every MSP has customers with home workers these days, so it’s an easy conversation to have.”