The Middleman Is Back – and This Time It's in Software Sales

01 /The Concept

Cloud services for SMBs is a commoditized fight – every major provider offers roughly the same stack at roughly the same price. Jotelulu competes on the same services but has built a structurally different business around them, using IT companies as its distribution channel rather than selling to businesses directly.

Jotelulu lets IT companies resell its cloud services to their own clients. The reseller gets an additional revenue stream on an existing customer base. And since the IT company wraps Jotelulu's infrastructure in its own solutions, the end client never needs to know who's running the underlying stack.

The service catalog available for resale includes base-tier servers and storage, remote desktop, VoIP telephony, helpdesk systems, and a marketplace of third-party cloud software and hardware. Everything is white-labeled – from the client's perspective, all of it comes from their IT partner, not some third-party provider.

IT companies could in theory resell services from large cloud providers, but in that case the client would know whose infrastructure they're on – and could route around the reseller by going direct, or switch to a competitor offering the same underlying service. Jotelulu was purpose-built with the reseller model in mind from the start, which means it offers them meaningfully higher margins. It also doesn't impose fixed retail prices, giving IT companies the freedom to bundle Jotelulu's services with their own and charge whatever they can.

On top of the margin opportunity, Jotelulu awards resellers credits based on the number of clients served and services sold. Those credits can offset the reseller's own Jotelulu infrastructure costs – effectively making their internal stack free. That's in addition to whatever they earn on the resale side.

Based in Spain, Jotelulu has already signed up more than 1,000 IT reseller companies across Spain, Portugal, and France. Revenue is growing roughly 3x year-over-year. The company just closed a new €6.8 million round, bringing total funding to €11.8 million.

02 /Why It Matters

Before the internet, everything moved through distribution chains. Manufacturer to national distributor, regional distributor, dealer, retailer, end customer. Margin for each link was baked into the retail price upfront.

The internet broke that model by enabling manufacturers to sell direct – cutting out intermediaries, compressing prices, expanding margin. Software led the charge: first shrink-wrap sold online, then SaaS delivered via browser. Direct-to-consumer became the default assumption in tech. For a while, that assumption held up.

But customer acquisition costs on the internet have been rising steadily for years. In some competitive software categories, direct sales have become unprofitable. And when the math on direct breaks down, the logic of distribution starts looking attractive again – particularly when you can find intermediaries whose customer acquisition cost is effectively zero because they already serve the target buyer.

That's the thesis Jotelulu is proving: use IT service companies as a distribution channel to reach SMBs, avoiding the cost of finding and converting those SMBs directly.

The same logic is showing up in SaaS. Uprise ([related review](/review/vygodnee-ne-iskat-klientov-samomu)) raised $4.7 million to build a marketplace of financial advisors for freelancers and SMBs that other SaaS products serving that customer segment can embed directly. Layer ([related review](/review/kak-bystro-poluchit-100-tysjach-tjoplyh-klientov)) raised $2.3 million for an accounting platform designed to be embedded in other SMB-focused SaaS. Upvest ([related review](/review/broker-vnutri)) built a private investment infrastructure platform that any consumer-facing service can embed – it's raised $94.5 million, most of it after my initial review.

Vendasta ([related review](/review/shans-zanjat-vygodnoe-mesto-v-novoj-voronke-prodazh)) went furthest. On one side, it lets web agencies, marketing firms, and other SMB-facing companies resell third-party cloud services under their own brand from their own marketplace. On the other side, it recruits cloud software developers to list their products for resale through those same intermediaries. Vendasta isn't a producer selling through intermediaries – it's a distributor-of-distributors, aggregating supply and distributing it through dealer networks. It has raised $185 million.

03 /Opportunities

Selling IT services through intermediaries is currently more exception than rule. But the economics driving it are structural: CAC on the internet keeps rising, while the cost for an existing service provider to upsell a trusted client stays near zero. That asymmetry will only become more pronounced.

For SaaS product builders, the clearest takeaway is to test the channel before assuming direct acquisition is the only path. Uprise, Layer, and Upvest all demonstrate that embedding in a complementary service's workflow can be both cheaper and stickier than paying to acquire users cold.

For those wanting to build distribution infrastructure, the Vendasta model – aggregate supply, build a reseller network, take a cut as the intermediary-of-intermediaries – is the expansive play. There's room for niche versions of that model focused on specific service categories and specific reseller types: the category shapes the right intermediary, and the intermediary shapes the right product bundle. The constraint is finding a reseller type that already has trusted relationships with the end buyer, and a service category where that trust transfers to the product being distributed.