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Data Security Startup Fortanix Raises $90M, Seeks To Boost Channel Sales

Jay Fitzgerald

‘The channel companies have the trust of their customers,’ says CEO Ambuj Kumar.

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Fortanix CEO Ambuj Kumar

Data security vendor Fortanix Inc. has raised an additional $90 million in funding as it seeks to expand its channel sales through an aggressive go-to-market campaign, the company announced on Thursday.

The new Series C funding for the Mountain View, Calif.-based Fortanix brings to $122 million that the startup has raised since its founding in 2016.

The round was led by Goldman Sachs Asset Management with participation from from GiantLeap Capital. Also participating were previous investors Foundation Capital, Intel Capital, Neotribe Ventures and the CIA’s venture firm, In-Q-Tel.

Soumya Rajamani, a vice president at Goldman Sachs, will join Fortanix’s board of directors.

In an interview with CRN, Ambuj Kumar, CEO and co-founder of Fortanix, said “most of the new money” will go toward an aggressive go-to-market campaign that will include meeting with existing and potential channel partners.

The firm also hopes to add members to its internal channel team.

Fortanix currently has about 15 employees focused on channel business – and that number could rise to 30 to 35 employees within a year, Kumar said.

“We’re a channel-first company,” said Kumar, noting nearly all of the firm’s revenues are generated via the channel.

The company didn’t disclose its annual revenues, but said in its release that it has experienced more than 500 percent growth over the past three years.

The company’s target market is companies with more than 1,000 employees and companies that handle sensitive data, such as finance, health-care and defense-industry firms, Kumar said.

The channel is key to Fortanix’s growth because its members are constantly interacting and working with a wide range of customers, Kumar said.

“Security has become a very complex subject for customers,” Kumar said, noting most customers simply don’t have the time and IT resources to deal with today’s array of cybercriminals.

“The channel companies have the trust of their customers,” he said. “For me, it is easier to convince a channel partner” about the benefits of Fortanix’s technologies.

Fortanix offers its “data-first” security by encrypting data no matter where it may be – in the cloud or on-premise.

The company touts its technology as cutting to the heart of what companies actually need and want when it comes to security – protection of their most sensitive data. So rather than traditional network security approaches, Fortanix offers “head-on” advanced data storage.

Fortanix also says its technology “allows organizations to credibly conform to privacy laws and regulatory requirements globally including GDPR, Schrems II, HIPAA, PCI, ITAR and several others.”

“We constantly look for companies with disruptive technologies and have seen the benefits of its data-first approach,” said Rajamani of Goldman Sachs in the company press release.

“Many businesses can relate to the challenge of data security and privacy, and we are proud to support the Fortanix team in their mission to solve security and privacy.”

Fortanix has about 225 employees, a 70 percent increase over its staffing levels a year ago. Earlier this year, it announced it had hired a new chief revenue officer, chief marketing officer and vice president of legal affairs.

Jay Fitzgerald

Jay Fitzgerald is a senior editor covering cybersecurity for CRN. Jay previously freelanced for the Boston Globe, Boston Business Journal, Boston magazine, Banker & Tradesman, MassterList.com, Harvard Business School’s Working Knowledge, the National Bureau of Economic Research and other entities. He can be reached at jfitzgerald@thechannelcompany.com.

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