EiQ Networks Lands $9.55M In Series C Funding, Looks To Invest In Growing Channel

EiQ Networks is the latest startup to benefit from a flow of funding entering the security industry, landing $9.55 million in Series C funding Tuesday that it says it will put toward growing its channel efforts around midmarket partners.

The new funding, led by Arrowroot Capital, brings the company's total funds raised to around $30 million.

Based in Boston, EiQ Networks offers a series of hybrid Software-as-a-Service security solutions aimed at helping midmarket customers get their security posture up to par with larger, better funded enterprises. The SaaS service includes critical security controls auditing, co-managed SIEM and log management, continuous vulnerability management, 24/7 security monitoring, incident analysis and remediation guidance, and compliance reporting.

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Matt Tirman, president and CEO of Redhawk Network Security, a Bend, Ore.-based EiQ Networks partner, said the new funding round is a "validation" of the company's solution. Since Redhawk partnered with EiQ last fall, he said, the partnership has been extremely beneficial, and the latest round of funding is "gravy" on top of the vendor's momentum in the midmarket space.

"As a partner, it definitely gets me excited," Tirman said. "It's validation of a product that we believe in and we're recommending to clients. … That's huge."

The latest round of funding will allow the company to ramp up its investments in sales and marketing, particularly toward its budding channel program, CEO Vijay Basani said in an interview with CRN. Those investments will prove key as EiQ Networks looks to continue its strong growth trajectory, having notched 178 percent year-over-year growth in 2015, Basani said.

"We have very high expectations in terms of growth," Basani said. "We had phenomenal growth last year."

For partners, Basani said, investments will take the form of partner marketing initiatives, as well as hiring more partner-focused employees and the development of partner and sales enablement tools. Basani said EiQ Networks sees the channel as a critical way of scaling the business, and will look to "get an increasingly large percentage of our sales from channel partners."

"We are committed to investing in and developing the partner network," Basani said. "We want to find the right partners and we want to invest in them." The company has about 15 to 20 partners and is looking to recruit the right partners over the next few years, ultimately looking to have a few hundred partners that are the right fit for the technology, he said.

Helping lead that investment is Dick Faulkner, vice president of worldwide sales, who joined the company last year from Hexis Cyber Solutions. He also has served as vice president of sales and operations at Sophos.

What sets EiQ Networks apart in the market is its focus on bringing deep security expertise to the midmarket, Basani said. That deep expertise, with more than 70 engineers and more than 30 Security Operations Center team members, is a "huge advantage" for customers over competitors such as SecureWorks and Alert Logic, he said.

"We are not only providing technology, but we are providing people, process and technology to elevate the midmarket customer's environment," Basani said. "We want to make it harder for the bad guys to break into our customers."

The midmarket poses a huge greenfield opportunity for partners, Basani said, estimating that 70 percent of the market is untapped. Basani said midmarket customers are increasingly becoming the target of attacks, as they often work with larger enterprises with valuable information and generally don't have the budget to invest in security technologies to protect themselves against attackers. However, Basani said, midmarket companies are starting to pay attention and are starting to make budget-friendly investments in security technologies.

"There is definitely increased awareness in the midmarket segment," Basani said. "They are realizing that they are being targeted and that they need to do something about it."