IoT Security Startup Armis Doubles Valuation To $2B With $125M Round

IoT security startup Armis has doubled its valuation to $2 billion in less than a year thanks to a new funding round that aims to open new business opportunities in health care, manufacturing and retail as the startup pursues its ambitions of going public.

The Palo Alto, Calif.-based company announced Tuesday that it has raised a $125 million funding round from Brookfield Technology Partners — the investment arm of alternative asset management company Brookfield Asset Management that manages more than $575 billion of assets — and other investors.

[Related: Akamai Buys IoT Security Vendor Inverse To Better Spot Devices ]

The firm said it decided to invest in Armis, which has more than 350 employees, after hearing about the issues of identifying and managing connected devices from chief information security officers across Brookfield’s various businesses.

“Brookfield underwent a thorough year-long industry evaluation, and it was clear that Armis was the only platform able to serve and scale globally across the vast industries in which we operate whether it be infrastructure, real estate, renewables, healthcare or telecom,” said Josh Raffaelli, managing partner at Brookfield Technology Partners, in a statement.

The round brings the company’s total funding to $300 million. The deal also included participation from Insight Partners, which had acquired Armis last year at a $1.1 billion valuation; CapitalG, Alphabet’s growth fund; and Georgian Partners, a firm that focuses on high-growth software companies.

Yevgeny Dibrov, CEO and co-founder of Armis, told CRN that the Brookfield deal will create new opportunities for Armis to sell its agentless device security platform into more than 100 Brookfield-owned businesses located across more than 30 countries that cover manufacturing, health care, retail, renewable energy and real estate.

Dibrov said the issue is pressing as malicious actors look to take advantage of unsecured IoT devices and operational technology assets to launch ransomware attacks, among other kinds of cyberattacks. Attacks on health care organizations are up from last year, and manufacturers in what Dibrov called the “COVID workflow” — producing vaccines and tests for the coronavirus — are also under threat.

“We‘ve seen a lot of risk there, and a lot of targeting by attackers there,” he said, adding that such attacks could stall operations.

Operational technology, which includes things like SCADA controls and energy monitoring systems, has becoming an increasing focus for Armis in the past two years, and Dibrov said one of his goals this year is to solidify the company’s leadership in OT security.

Dibrov also sees opportunity with the many organizations that continue to have their employees work from home, which is creating new security challenges. To address them, the company rolled out the Armis Asset Management solution as a standalone offering in January, giving organizations expanded visibility and control of devices and systems that are remotely connecting to corporate networks.

“Based on a lot of customer feedback, we‘ve been working on that for more than more than a year,” Dibrov said, adding that customers were looking for a solution that would allow them to view all their assets, from cloud instances and virtual machines to laptops at employees’ homes, in one place.

The Brookfield deal means new potential opportunities for Armis’ channel partners, which are supported by a services-focused partner program that launched last year, according to Dibrov. The company plans to use a portion of the new funding to expand the company’s partner organization, which covers 130 total partners now and is led by former Symantec channel executive Peter Doggart.

“In terms of our business and across all the Brookfield entities, we are going to involve our partners from a variety of different types,” Dibrov said.

As part of the new funding round, Armis disclosed that its revenue has grown more than 750 percent over the past two years while its customer base — which includes Sysco, Fresenius Medical Care, Home Depot, Mondelez and Oracle — has increased by over 425 percent. And the company is on track to double its business again this year, according to Armis CFO Jonathan Carr.

Michael Parker, the company’s CMO, declined to say how much of total revenue partners are contributing, but he said they are driving a significant amount of customer deals.

“We’ve seen such a ramp up, even during this past year, of our partners, where they’re really becoming an equal player in what they’re bringing to the table for Armis,” he said. “And that’s one of the reasons we want to invest there.”

While many IoT security startups are getting acquired, Dibrov said he intends for Armis to become a publicly traded company through an initial public offering, adding that the company has the right strategy and a “huge, total addressable market.”

“We are building our business with the support of Brookfield now, the folks at Insight and CapitalG, towards an IPO,” he said. “This is why we are a building a platform.”

Carr, who was brought in last year, said while the company is “working towards being public-ready,” Armis is “well-funded and well-backed,” calling the latest round “opportunistic.” He added that the company plans to hire 100 to 200 people in the next year.

“An IPO is something that we’re excited about, but it’s certainly not something that we necessarily feel like we need to do from a funding perspective,” he said.