Apiiro Raises $100M After Palo Alto Networks Reportedly Ends Takeover Talks
The application security startup plans to expand in U.S. as an independent company, CEO says
Two weeks after Palo Alto Networks reportedly pulled out of talks to acquire Apiiro, the cybersecurity startup announced Thursday that it has raised $100 million in new funding that the firm plans to primarily spend on sales and marketing.
The Series B funding for Apiiro, a cloud-native application security firm with headquarters in New York and R&D operations in Tel Aviv, Israel, brings to $135 million that Apiiro has raised since its founding in 2019.
The latest investment round was led by General Catalyst with participation from Greylock and Kleiner Perkins.
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Idan Plotnik, co-founder and CEO of Apiiro, told CRN that his firm “absolutely” plans to spend some of the newly raised money on expanding its channel sales, though he declined to say what percentage of Apiiro’s revenues are currently generated via the channel.
“We are already in GitHub and Google marketplaces and now we are also increasing (sales) through channels,” he said. “The U.S. is the main market target.”
But Plotnik said he doesn’t see the channel generating the majority of the firm’s revenues in the near future. “Application security is a complex domain,” he said, noting his firm has to work closely with clients on technology issues.
While Apiiro plans to grow its sales-and-marketing operations in general, Plotnik said expansion of the firm’s workforce will be done with a “a lot of caution.”
“As you know, the market is not in a good shape right now – and we don’t want to be in a situation where we are firing people,” said Plotnik.
Though he didn’t mention other cybersecurity firms by name, Plotnik was clearly referring to troubles facing later-stage cybersecurity startups such as Snyk and Cybereason, both of which have recently laid off employees amid uncertain economic times.
Besides sales and marketing, Plotnik said Apiiro plans to invest funds in its engineering areas.
Apiiro’s new Series B funding comes two weeks after months-long takeover talks between cybersecurity giant Palo Alto Networks and Apiiro collapsed, reportedly over differences regarding Apiiro’s valuation, according to a report at Calcalist.
Palo Alto Network reportedly offered as much as $600 million for Apiiro, but it apparently wasn’t enough for the security startup, Calcalist reported.
In a follow-up email statement to CRN, Plotnik said he “cannot comment on rumors,” but he made clear he’s content Apiiro has remained an independent company.
“We have (principles) and values and we will never leave our amazing employees behind,” he said, without elaborating. “They are the power that built Apiiro, they are the most important thing for us and the reason why we are successful.
He added: “In most cases, large cybersecurity companies think that money can solve their product and culture cacophony.”
In his statement, he also expressed high expectations for Apiiro.
“While we considered several options to expand our business, we’ve seen significant market demand for next generation application security solutions and our team is well positioned to address this need at scale,” he said.
“We are on a mission to build a $10 billion independent company in the next few years in a reasonable and profitable way, and this significant funding enables us to do just that, while continuing to lead the market and drive our next phase of growth.”
In a press release, Apiiro said it has introduced a “completely new approach” to application security in the cloud by “providing complete visibility into code bases, assessing risks from design to code to cloud and proactively fixing actual risks that attackers can exploit before releasing to the cloud. “
Quentin Clark, managing director at General Catalyst, praised the work of Plotnik and his colleages at Apiiro.
“In this economy, it’s important to invest in technology that helps companies drive business growth,” said Clark in a statement.
“They are going beyond providing tools for developers to address potential security issues in the code base and actually delivering an operational platform that workflows those fixes in context of how a company is configuring and deploying software. This approach has driven phenomenal growth to date, which comes from strong execution with the right team at the right time.”