10 Funding Infusions Impacting The Channel In 2016 (So Far)
Show Them The Money
Financing from the venture capital and private equity community continued to flow to IT companies in the first half of 2016, mostly to hot startups with leading-edge technologies, but also to established companies with a need for fresh capital to take their businesses to the next level.
Here's a look at 10 significant funding infusions in the first half of the year that flowed to IT companies that are active in the channel.
Symantec Receives $1B Strategic Investment From Silver Lake, $750M From Bain
Top Executive: CEO Greg Clark
Security technology developer Symantec was a major beneficiary of the venture capital community in the first half of 2016.
In early February, just days after completing it's long-planned divestment of its Veritas storage management business, security technology vendor Symantec received a $500 million strategic investment from private equity firm Silver Lake. At the time of the investment Symantec indicated it would use at least some of the funding for an accelerated share repurchase program.
The investment came after a three-year transformative period for Symantec that, along with the Veritas divestiture (bringing in $5.3 billion for Symantec), included changes in the company's top executive ranks, layoffs and restructurings.
But the company wasn't done. On June 13 Symantec, based in Mountain View, Calif., struck a deal to acquire security technology developer Blue Coat Systems for $4.65 billion. As part of the deal Bain Capital, which owned Blue Coat, agreed to reinvest $750 million of that purchase price back into the combined company. And, at the same time, Silver Lake said it would double its investment to $1 billion.
SaaS IT Monitoring Tool Provider LogicMonitor Raises $130M
Top Executive: President, CEO Kevin McGibben
LogicMonitor received $130 million in private equity financing from Providence Equity Partners in mid-June. LogicMonitor, which says it's disrupting the legacy IT infrastructure, is using the new funding to accelerate its global expansion.
LogicMonitor, founded in 2008 and based in Santa Barbara, Calif., has developed a Software-as-a-Service IT infrastructure monitoring platform that can be used to monitor and manage the performance of on-premise, cloud and hybrid data center systems.
The vendor's partner ecosystem includes managed service providers, support providers and technology partners.
Next-Generation Endpoint Security Vendor Cylance Lands $100M In Funding
Top Executive: CEO Stuart McClure
Cylance developed security software that does away with signature-based technology used by traditional endpoint security systems, basing it instead on mathematics and algorithms to identify suspect behavior.
In Early June the company raised $100 million in Series D funding from new investors Blackstone Tactical Opportunities and Insight Venture Partners, along with existing investors.
The Irvine, Calif.-based company is using the funding to expand sales and marketing efforts with partners and further establish its leadership position in the next-generation endpoint security market. The company partners with resellers and managed security service providers.
ForeScout Pulls In $76M In Funding, Hits 'Unicorn' Market Valuation Status
Top Executive: President, CEO Michael DeCesare
In late January ForeScout Technologies, a security technology developer that reported 77 percent revenue growth to $125 million in 2015, pulled in $76 million in late-stage financing. Combined with the funding raised in previous rounds, the total funding gives the Campbell, Calif.-based company "unicorn" status with a total valuation of $1 billion or more.
The latest funding round was led by Wellington Management Co. LLP.
ForeScout is eyeing the nascent Internet of Things market with software that provides an agent-less visibility and enforcement security system for all connected devices. The company plans to use the new funding to step up sales to compete against rival Cisco, invest in research and development and build more third-party integrations, and build out the company's technical support organization.
IPO-Focused Nutanix Takes $75 Million Loan From Investor Goldman Sachs
Top Executive: CEO Dheeraj Pandey
Nutanix, the top-funded startup in the hyper-convergence technology market, took a $75 million loan from investor Goldman Sachs in April as the company continued to gear up for its long-awaited initial public offering. According to a filing with the U.S. Securities and Exchange Commission the company is expected to pay back the loan once it stages its IPO.
Nutanix CFO Duston Williams described the loan as "opportunistic insurance financing" that was lower cost than other financing alternatives. Nutanix, a pioneer in the hyper-converged infrastructure arena, raised more than $312 million in funding since its 2009 founding.
The San Jose, Calif.-based company has reported 17 percent average quarterly revenue for the last seven fiscal quarters, according to an SEC filing, and reported revenue of $114.7 million in the three months ended April 30 of this year.
Malwarebytes Lands $50M In Funding, Looks To Invest In Acquisitions, Channel Efforts
Top Executive: CEO Marcin Kleczynski
Malwarebytes, a security software vendor well-known in the consumer space, raised $50 million in Series B funding in late January which the San Jose, Calif.-based company will use to further its research and development work, grow its channel efforts and possibly make key acquisitions as it expands its presence in business markets.
Fidelity Management and Research Co. led the funding round. It adds to the $30 million the company raised form Highland Capital in July 2014.
In 2014 Malwarebytes did about a third of its business through the channel and about half in 2015. The company counts such big names as CDW and Optiv Security among its channel partners.
Search-Based Analytics Software Developer ThoughtSpot Raises $50M
Top Executive: CEO Ajeet Singh
In May ThoughtSpot, which provides relational search engine software for data analysis tasks, raised $50 million in Series C financing from General Catalyst Partners, Lightspeed Ventures, Khosla Ventures and Geodesic Capital.
Palo Alto, Calif.-based ThoughtSpot, founded in 2012, plans to use the new financing to continue its expansion into EMEA markets, accelerate its research and development efforts, and build up its sales, marketing and service staff.
ThoughtSpot's partner ecosystem includes channel, technology and implementation partners.
Zerto Closes $50M Funding Round, Hires Ex-HPE Executive For Product Management
Top Executive: CEO Ziv Kedem
Zerto, a developer of enterprise virtualized data center and cloud disaster recovery software, raised $50 million in funding in late January – money the Boston-based company is applying toward continued product development. (On June 21 the company raised an additional $20 million as part of the Series E round with investors led by CRV.)
At the same time as the funding announcement, Zerto disclosed that it had hired Rob Strechay as the company's new product management vice president. Partners said the new funding, along with Strechay's hiring, would help Zerto grow to the next level of maturity and expand its competitive efforts.
The new financing brought Zerto's total funding to $110 million and could be the company's last such round before going public.
Ionic Security Raises $45M In Series D Funding
Top Executive: CEO Adam Ghetti
Data security technology developer Ionic Security raised $45 million in June in a Series D or "growth" round of financing. Investors included Amazon.com, Goldman Sachs, Hayman Capital, GV (formerly Google Ventures), Icon Ventures, Kleiner Perkins Caufield & Byers, Meritech Capital Partners and Tech Operators.
Atlanta-based Ionic Security provides data protection and control technology for protecting data that resides in a corporate network, in the cloud and on mobile devices.
The company is well positioned to profit from the nascent Internet of Things market: In July the U.S. Department of Homeland Security's Science and Technology Directorate awarded the company $119,000 to provide security technology for the agency's IoT systems security initiatives.
vArmour Raises $41 Million To Accelerate Its Global Expansion
Top Executive: CEO Tim Eades
vArmour is a rising company in the market for data center and cloud security technology. In May it raised $41 million in a Series D funding round led by Redline Capital and Telstra. That brought the company's total financing to $83 million.
The Mountain View, Calif.-based company said it would use the capital to accelerate worldwide distribution of its Distributed Security System software through strategic partners in North America, Asia-Pacific and EMEA.