Axonius CEO On Raising $200M In Funding, M&A Plans

Dean Sysman, co-founder and CEO of the cybersecurity asset management vendor, also tells CRN that the company continues to work toward an eventual IPO.

Axonius announced Tuesday it has raised $200 million in an extension to its Series E funding round as the company looks toward startup acquisitions and further investment into its work with channel partners, Co-Founder and CEO Dean Sysman told CRN.

The new funding for the cybersecurity asset management vendor was led by Accel and Lightspeed Venture Partners, and included participation from Stripes, the company said. Axonius raised the funding at the same valuation as during its prior round, $2.6 billion, Sysman said.

That’s notable because the fundraising environment during that prior round, in early 2022, was a very different story than it is today, he said.

“That shows that we’re not on a valuation that was from a different market. We’re priced for this market,” Sysman said.

The company has now raised $595 million since its launch in 2017.

Axonius also announced Tuesday that it crossed $100 million in annual recurring revenue last year, a milestone that the company crossed within 4.5 years, according to the vendor.

What follows is an edited and condensed portion of CRN’s interview with Sysman.

What prompted you to raise this funding now?

Really, this funding round was not because we needed the funding, but moreso, we wanted to show our strength and our position to the market. We decided to do this round to show people that even though our last funding round was in early 2022, this round has been at the same valuation, $2.6 billion. And the second is, we're really looking at acquisitions. And we're really open and considering doing an acquisition as the future unfolds. As a potential future public company, it's something that we know is really important to be able to be good at.

Is there anything you could share about what segments you might be looking to acquire in? And when are you thinking for a possible IPO timeframe?

We have customers of every size, every industry, every region. And what we're realizing is that the problem we're solving is very universal. Every organization needs it. It's a very foundational thing of every security and IT program. Today we have about 630 customers. It's very easy to imagine us getting to 6,000 or even 60,000 customers. And that means that we really have the potential to be one of the major software companies of the world. And to me, to achieve that vision, that means that going public is the tool to do that. Going public is not a goal in and of itself, for us. But it's a tool to fulfill that vision. And going forward, I think it's something that you need to be ready for. You need to be ready from a business standpoint, from a regulatory standpoint. And we're definitely in the process of doing that. But you also need the market to be ready. And I think the IPO window isn't open yet. I am as curious as anybody to see what happens this year.

A good area for acquisition is, what are other types of assets that we can add to our platform? And the second is, since we have all these adapters and connectors, and this very unique data set. So we can also create applications on top of this data. So any kind of application that uses the data and the access within the platform, that's another aspect of potential acquisition.

What is your priority for what you’re focusing on with partners this year?

So from the day we started, we were a channel-first company — meaning in every single customer engagement, we want to work with partners. And one of the things that we've tried to really invest a lot in — and this funding is definitely continuing that trend — is to help our partners be an even bigger aspect of the value that our customers get from our platform. And that could come in the form of professional services or other ways to work with customers. To enable our partners to do that, even beyond what we're doing today, that's one of our focus areas and our priorities for the future.