Cylance Adds $120M In Funding To Drive Foreign Expansion, Extend Breadth Of Offerings
Cylance has landed an additional $120 million of outside funding as the company looks to continue its global expansion and grow its portfolio of offerings.
The Irvine, Calif.-based next-generation endpoint security player said the funding -- led by Blackstone Tactical Opportunities -- will bolster the company's sales, marketing and development efforts. Specifically, Cylance said the money should help with increasing market share, extending its breadth of product offerings, and further expanding the company's footprint across Europe, the Middle East, and Asia-Pacific.
"The investment supports our growth strategy and will enable us to continue on the path to becoming cash flow positive," Brian Robins, Cylance's CFO, said in a statement.
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In addition to leading the $120 million Series E round announced Tuesday, Blackstone Tactical Opportunities also spearheaded Cylance's $100 million Series D funding in June 2016. Since being founded in 2012, Cylance has now raised $297 million in five rounds of funding.
"Blackstone was an early believer in Cylance's approach of applying AI to prevent one of the most difficult issues businesses face today – cyberattacks that disrupt operations and damage reputations," Viral Patel, senior managing director in Blackstone's Tactical Opportunities group, said in a statement.
Cylance's announcement came just hours after next-generation endpoint security competitor CrowdStrike announced a $200 million Series E funding round of its own, bringing the Sunnyvale, Calif.-based rising star up to $481 million of outside equity.
Fellow emerging endpoint security player Carbon Black raised $152 million through an initial public offering in early May, while other peers such as Cybereason, Endgame, and SentinelOne have attracted between $105 million and $190 million of outside equity.
Cylance, meanwhile, saw its revenue in its most recent fiscal year grow by 90 percent to $130 million, according to Robins. The company supports more than 4,000 customers, Robins said, including 20 percent of the Fortune 500. Cylance didn't immediately respond to a request for additional comment.
Robins himself joined Cylance in August 2015 after more than two years as chief financial officer at compliance and threat management player AlienVault. Robins also spent six years as treasurer of Neustar, where he led the cloud services player through an initial public offering and the integration of multiple acquisitions.
The company in January announced that it had hit the $100 million revenue mark just 39 months after the first shipment of its flagship product. This made Cylance one of the fastest-growing security companies in history, according to the company, even surpassing the rapid rise of companies like Palo Alto Networks, FireEye and Okta.
"Cylance has proven that artificial intelligence can defend against cybersecurity problems that were previously thought impossible to prevent," Cylance CEO Stuart McClure said in a statement. "With the most advanced application of AI in endpoint security, Cylance products continually learn and improve over time."
The company said it pioneered the first machine learning-powered predictive endpoint security offering, making it possible to protect users from unknown cyberattacks. Cylance said it has prevented more than 23 million attacks worldwide, including some four million previously unidentified attacks.
The types of attacks prevented by Cylance include both known and unknown threats such as ransomware, exploit and memory attacks, fireless attacks, script-based attacks, and living off the land attacks, according to the company.
Given Cylance's rampant success, it's not surprising that the company would need more money to provide endpoint protection services on a global scale, according to Justin Kallhoff, CEO at Lincoln, Neb.-based Cylance partner Infogressive.
"With more success requires more money, especially at the speed at which they're grabbing market share," Kallhoff said. "They're one of the best, if not the best, partner I've ever had."
Cylance truly understands the channel, respect loyalty, and rewards partners that are committed to delivering results, according to Kallhoff.
"A lot of people are talking," Kallhoff said. "Not a lot of people are fulfilling the promise."
Kallhoff would like to see Cylance spent some of the money on more cooperative marketing with channel partners to help them reach decision-makers and cut through all the hype. This is particularly important since the endpoint security manufacturers are all pretty much saying the exact same thing today, Kallhoff said.
With endpoint security incumbents spending heavily to protect their existing revenue stream, Kallhoff said it's important to Cylance to make an impression on IT people who haven't even heard of the company today.
"You're going to need money to get the word out," Kallhoff said. "It takes money to make money."