Scottsdale, Arizona - November 12, 2025 - Top Down Ventures, the first early-stage venture capital firm dedicated to MSP software and automation, today released its landmark research paper, The State of MSP Capital in the Age of AI. The comprehensive report explores how artificial intelligence (AI), capital efficiency, and governance are converging to redefine the global managed services ecosystem. Prepared for the Top Down Horizons MSP Investor Summit, the study provides the most in-depth view yet of how venture and private equity investors are reshaping the market and how MSPs and software vendors are evolving into Managed AI Platforms.
“Managed services has become the connective tissue of the global SMB economy, which is set to surpass the enterprise IT market in size in 2026.” said Joel Abramson, Managing Partner at Top Down Ventures. “AI is transforming these providers from maintenance partners into intelligence partners, and capital is following that shift. The next decade will belong to the companies that embed learning, governance, and transparency into every workflow.”
The State of MSP Capital in the Age of AI
The report traces the managed services industry’s evolution across three epochs: Bootstrapping, Private Equity Industrialization, and Capital Efficiency and Intelligence, and identifies a fourth now emerging: the Next-Gen MSP. It explores how investors are transitioning from traditional financial engineering to operational intelligence, embedding automation and AI within portfolio companies to drive efficiency and value creation, rather than relying solely on consolidation for growth.
Key highlights of the report include:
- Capital Divergence - Public and private markets are rewarding AI-enabled efficiency while compressing valuations for traditional SaaS and service models.
- The Rise of Managed AI Platforms - MSPs and their software partners are evolving into orchestrators of intelligent systems that deliver measurable business outcomes. Managed AI platforms are forecast to become a US$1.3 trillion market by 2030, with average EBITDA margins above 25%.
- Platformization and Control Planes - North American MSP vendors such as ConnectWise, Pax8, ScalePad and NinjaOne are defining new systems of action that unify security, compliance, and automation.
- Global Expansion - Global managed services revenue is projected to grow from US$595 billion in 2025 to US$950 billion by 2030. Regulatory frameworks like NIS2 and DORA are accelerating MSP adoption in EMEA and APAC, where compliance-driven spending is boosting margins and valuation parity with North America.
- Corporate Venture Capital (CVC) - The report outlines how first-mover MSP platforms can deploy CVC programs to invest in automation, governance, and agentic AI startups, creating defensive data moats and faster product-market validation.
- Unlocking the AUM Vault - After 15-years of private equity participation and a renaissance of venture capital interest driven by Managed AI, the MSP industry is poised for increased liquidity among its multiple $1B+ ARR companies through strategic acquirors and initial public offerings (IPO). This will ultimately unlock significant assets under management (AUM) and elevate valuations for the next-generation of founders.
“This is not just an investor report,” said Mark Scott, General Partner at Top Down Ventures. “It’s a blueprint for how capital, technology, and governance will intersect in the coming years. Managed AI is no longer a hypothesis, it’s an investable asset class. We have entered the AI supercycle!”
MSP Industry Leaders Give Their Thoughts on Top Down Horizons Report
“The shift underway in managed services is unmistakable. As articulated in Top Down’s report, MSPs are moving beyond maintaining systems to orchestrating intelligence - using automation, data, and AI to deliver measurable business outcomes. What’s emerging isn’t just a more efficient operating model; it’s a new framework for defining value, profitability, and equity in managed services,” said Larry Walsh, CEO and chief analyst at Channelnomics, a channel research and strategy firm.
For more insight from Walsh, read his latest piece on the topic: The Age of Managed Intelligence is Now.
Our 67-page research paper concludes that Managed AI is set to become the backbone of global SMB productivity and that capital markets will increasingly classify these platforms as digital infrastructure, stable, measurable, and essential to modern business operations.
Access The State of MSP Capital in the Age of AI by clicking the button below or learn more about the Top Down Horizons Summit, by visiting www.topdown.com/horizons.
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About Top Down Ventures
Top Down Ventures is the first early-stage venture capital firm focused on the Managed Services Provider (MSP) software ecosystem. The firm partners with founders building the next-generation of automation, governance, and intelligence platforms for the global SMB market. Through a combination of deep research, targeted venture investment, and ecosystem enablement, including our annual Top Down Horizons Summit, Top Down’s mission is to elevate the MSP industry across the global investment community from Main Street to Wall Street. Learn more at www.topdown.com.
(All data and projections cited from The State of MSP Capital in the Age of AI, Top Down Ventures 2025, unless otherwise noted.)