Cybersecurity Startup Exabeam Raises $50M To Drive Global Growth

Exabeam has completed a $50 million funding round to expand its presence in the developing world and strengthen its offerings for systems integrators and larger VARs.

The San Mateo, Calif.-based cybersecurity startup said the $50 million Series D round will enable Exabeam to better support VARs with more than $10 million of annual sales as well as grow its business in Southeast Asia, Central and Eastern Europe, the Middle East, and Latin America, according to Ted Plumis, vice president of worldwide channels.

"It was just time to put more gas on the fire and grow," Plumis told CRN.

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Exabeam was founded in 2013, focuses on Security Information and Event Management (SIEM), and has now raised $115 million in four rounds of outside funding, according to CrunchBase. The Series D round was led by venture capital firm Lightspeed Venture Partners, which also teamed up with Cisco Investments to lead Exabeam's $30 million Series C round in February 2017.

Lightspeed provides its portfolio companies with everything from customer access through CIO forums to networking opportunities with other cybersecurity startups that are in a similar stage to or larger than Exabeam, according to Plumis.

Exabeam was primarily selling an advanced analytics product that attached to a third-party SIEM product in its initial years, which Plumis said was best-suited for developed markets such as the United States, Western Europe, Japan, Singapore, Hong Kong and Australia. At the time, he said many firms in the developing world didn't have an SIEM platform, which made the advanced analytics a non-starter.

But Exabeam is now in a better position to compete for business in the developing world with its own SIEM offering, which Plumis said is often sold through service providers abroad. Although the firm did not disclose sales figures, Exabeam currently derives 45 percent of its revenue from North America, 30 percent from Europe and the Middle East, 20 percent from Asia-Pacific, and the remaining 5 percent from Latin America, according to Plumis.

Exabeam sells exclusively through its 201 active channel partners to more than 20 countries around the world, Plumis said. The company now has multiple partners doing more than $10 million of annual sales, and he said Exabeam plans to stratify the channel opportunity to help partners grow more effectively.

Solution providers with more than $10 million of annual sales typically have established SIEM practices as well as national or international reach, according to Plumis. As a result, Plumis said these partners are often looking for assistance with services and marketing programs to better capture expansion opportunities.

Conversely, Plumis said channel partners with less than $2 million of annual Exabeam sales are either just trying to break into the SIEM space now or have the tactical need to occasionally sell an SIEM offering but don't consider to be core to their business. For these smaller solution providers, Plumis said Exabeam's channel management typically focuses more on training and support.

Exabeam had worked sporadically with systems integrators since Plumis joined the company in 2015, but has doubled down on its commitment over the past nine months by signing partnership agreements with three well-known, global SIs.

These SIs play a vital role in helping Exabeam navigate accounts where SIEM services can be integrated into projects for security operations center (SOC) automation, Plumis said, as well as capitalize on opportunities where third-party identity and access management capabilities can be tightly aligned with Exabeam's advanced analytics offering.

Consortium Networks began selling Exabeam's advanced analytics offering nearly two years ago, and more recently began support the company's relatively new data lake service, according to Larry Pfeifer, president of the Medford, N.J.-based solution provider.

Pfeifer praised Exabeam for pricing its products on a per-employee basis rather than embracing the usage-based pricing model that's common among Exabeam's peers. A per-user pricing model makes it easier for customers to understand what they need to pay upfront, he said, and doesn't force them into a situation where they're attempting to trim down logs or avoid granularity in order to save money.

Exabeam also goes above and beyond for the customer, Pfeifer said, with company leaders willing to get on the phone with installers at the customer site and personally walk them through how to deploy the product and get the best bang for their buck.

Pfeifer would like to see Exabeam use the infusion of Series D capital to further define its go-to-market strategy around its SOAR (security orchestration, automation and response) offering, as well as make the company's data lake tool easier to deploy.

"They're one of our strategic partners we go to market with," Pfeifer said.