Reports: EMC Lead Investor In Cloud Security Startup Zscaler's $38M Funding


Zscaler, a startup developer of multitenant security technology for cloud environments, on Thursday reported the closing of a $38 million round of funding, with the biggest investor in the round possibly being storage king EMC.

The Boston Business Journal, citing an unnamed source, reported that EMC was the main investor in the round.

The EMC relationship with Zscaler started in February when EMC's RSA Security business unit started working with Zscaler to jointly develop a cloud-based solution to assert continuous trust in identities accessing any Web application or cloud service, according to Zscaler.

[Related: EMC Considering Acquisitions In Security Market]

Zscaler, Santa Clara, Calif., came out of stealth mode in Aug. 2008 with the introduction of its cloud-based security service. Until this new $38 million round, the company was self-funded.

The company's Zscaler Web Security solution leverages what it calls the world’s largest global security cloud to deliver comprehensive protection against advanced and emerging threats.

Zscaler Web Security is built on a multitenant cloud architecture and delivers real-time security. The company said IT security teams can create and deploy granular Web-based policies by user, group, location or action to any device in any location.

Despite its focus on the storage industry, EMC is no stranger to the security market. EMC in 2006 acquired RSA Security, at the time one of the largest security industry companies.

Indeed, reports widely circulated earlier this month that EMC is considering investing some of its $5.65 billion in cash to increase its security technology portfolio, including potential acquisitions of security appliance developers as Fortinet, Sunnyvale, Calif.; Palo Alto Networks, Santa Clara, Calif.; and Check Point Software Technologies, Redwood City, Calif.

Security is also a growing business for EMC. In July, the Hopkinton, Mass.-based company reported that, during its second fiscal quarter of 2012, EMC's RSA Security division saw revenue growth of 13 percent over last year to $221 million.

An EMC spokesperson said that company declined to comment, and a Zscaler spokesperson did not respond to requests for further information by press time.

PUBLISHED AUG. 30, 2012