Armor Lands $89M In New Funding, Looks To Expand Cloud Security Platform To The Channel

Cloud security platform company Armor has landed $89 million in financing, the company announced Wednesday, and will now set its sights on further expanding its channel strategy.

The equity financing round was led by ST Telemedia (STT), who will now join The Stephens Group as a joint lead shareholder, the Richardson, Texas-based company said.

"That's a huge vote of confidence," said Rudy Campos, vice president of sales, marketing, and partner alliances at Chicago-based FlexManage. The funding is "really good news for us as a partner," Campos said.

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Armor provides a managed security services offering to protect data and applications in the public cloud and on-premises, which includes on-going security monitoring by the Armor SOC and remediation capabilities. The company also provides its own secure, managed virtual private cloud.

In an interview with CRN, President Jared Day said Armor has been on a rapid growth trajectory and has seen upwards of 400 percent growth over the past four years. He said the company decided it was time for a large funding round build a "war chest" for investments around distribution, sales and marketing, and R&D. He said more than half of the equity financing round would go to investments in the business, with the remainder to the company's angel investors.

Day said the No. 1 priority for Armor with the funding is to invest in sales and marketing, specifically to build out a channel distribution models. Building a channel strategy is "one of our top two priorities as a company right now," Day said.

He said the company has traditionally been a direct sales company, with around 10 to 20 percent of its business through the channel. He said Armor has already transitioned to 30 to 40 percent of business through partners, but would like to get closer to 60 percent shortly.

Day said Armor currently has close to 60 partners, a group that is primarily composed of managed service providers with public cloud offerings. He said Armor has a strong value proposition for those MSPs, as its solutions help remove the security barrier to the cloud for many clients.

"Security is a big issue in adopting public cloud. It’s a potential barrier, and when we can equip a channel partner to solve that security problem, it's extremely valuable," Day said. "We're getting a great deal of interest."

Day said Armor would look to use the financing to invest in the pipeline around the channel, including events, marketing support, and hiring a bigger channel team. Those areas will be the "first thing we will spend the money on," he said.

Armor will also look to invest in expanding its portfolio, Day said, including investing in R&D and acquisitions. He said Armor has already tripled its R&D spend over the past 18 months and will look to invest further in integrations with large cloud providers, other security vendors, and building out its own platform. He said Armor would also look to make acquisitions, with a particular eye to expanding its capabilities around artificial intelligence and analytics.

"It’s a very competitive market. There are a lot of companies trying to enter the space and build products. We need to invest a lot to stay ahead. That is another big company priority," Day said.

FlexManage's Campos said he expects the new funding will accelerate the growth he's seen with Armor since his company signed on as a partner several months ago. He said Armor has already become one of FlexManage's top strategic partners and has seen more traction than with any other partner in the same period. Campos said investments around a channel go to market strategy, as well as further investments in R&D will help Armor stay ahead of the market in cloud security.

"I think it helps from a competitive standpoint … [The competition is] constantly growing and advancing their services. To know that Armor is in that same boat and will be advancing at that same level helps us compete in the market and helps us know we made the right decision to partner with Armor."

That is especially important, Campos said, as customers are putting security as one of their top priorities when moving to the cloud.

"It's created a huge opportunity for us as a partner and for the channel in general … We are definitely seeing the need around security becoming more and more important," Campos said.

Day said the company's new funding would help it grow sales and R&D, allowing it to move towards its longer-term goals of international expansion and becoming a leading brand in cloud security.

"We want Armor to be synonymous with public cloud security," Day said. "That's our goal and where we're headed, but there's a lot to do [to get there]."