Expel Raises $140M In Google-Backed Funding To Grow Abroad
‘We’ve had great success thus far, and we see massive opportunity in the future for what we do. CapitalG is really investing in companies that have truly massive global potential,’ Expel CEO Dave Merkel tells CRN.
Expel has closed a Series E funding round and notched a $1 billion valuation to strengthen Kubernetes workload protection, international sales and the channel organization.
The Herndon, Va.-based managed detection and response (MDR) provider wants to use proceeds from the $140.3 million funding round to accelerate its business abroad by establishing a brick-and-mortar presence in Europe and Asia-Pacific over the next year, said CEO Dave Merkel. The Series E funding was led by CapitalG, Alphabet’s independent growth fund, which also led the company’s Series D last year.
“We’ve had great success thus far, and we see massive opportunity in the future for what we do,” Merkel told CRN. “CapitalG is really investing in companies that have truly massive global potential.”
Expel has already opportunistically captured business in Canada, the United Kingdom, Australia and Singapore thanks to investments the company has made in the United States, and Merkel said the company has brought in new leadership to drive more strategic growth abroad. The company is currently studying where to situated personnel to best capture both current and future opportunities.
“We’ve seen that opportunistic business become a little more of a drumbeat,” Merkel said. “We know the demand is there, and we’ve got the benefit of actual advocates on the ground.”
From a product standpoint, Merkel said Expel plans to invest in being relevant around Kubernetes workload defense given the rise in adoption of Kubernetes technology. Specifically, customers need help determining if something bad is happening in the Kubernetes domain, which Merkel said requires significant additional detection work since that isn’t easy to ascertain based on the infrastructure itself.
Customers also need help applying vulnerability management data in an intelligent manner so that it doesn’t just sit in silos, Merkel said. Expel’s platform can determine whether a customer has been hacked in a less labor-intensive manner that doesn’t require personnel to look at data from vulnerability scans all day, according to Merkel.
“There’s just not great operationalization of vulnerability management data today,” Merkel said.
As far as go-to-market is concerned, Merkel said Expel currently has 45 solution provider partners and hopes to drive most of its business through the channel in the future. Channel partners typically sell network security, endpoint security and SIEM products that Expel integrates with as well as services like a virtual CISO, though they usually aren’t supporting a competing MDR product, according to Merkel.
Expel plans to use proceeds from its Series E funding to build out its channel team, enhance its programs, invest in partner resources and marketing, and start doing solution provider events, Merkel said. The company has over the past year tapped an executive to oversee partner relationships and continued to add to its partner sales organization, according to Merkel.
“We view the channel as a strategic asset,” Merkel said. “We love working with our partners.”
From a metrics standpoint, Merkel said Expel plans to focus on annual recurring revenue, gross margin, net recurring revenue, and sales efficiency. Expel offers the opportunity for generous gross margins since it greatly reduces the number of people customers need in the Security Operations Center, while net recurring revenue should indicate the extent to which customers are renewing and expanding.
“Everybody should know us, and everybody should know us globally,” Merkel said.