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Snyk Raises $530M On $8.5B Valuation To Protect Applications

The Series F funding should position Snyk to go public in late 2022 or early 2023, with the company using the proceeds to invest aggressively in its product and engineering organization, says CEO Peter McKay.

Snyk has become the second-most-valuable venture-backed cybersecurity company in the world, raising $530 million on an $8.5 billion valuation to fuel product innovation and development. 

The Boston-based application security vendor said it plans to use the Series F investment to introduce new enhancements, features and workflow integration as well as improved functionality to its Developer Security Platform. The $530 million investment was co-led by private equity firms Sands Capital Ventures and Tiger Global.

“If you want to be on the cutting edge of software development and cloud-native applications, that’s where we are. That’s where the market is moving,” Snyk CEO Peter McKay (pictured) told CRN. “And so if you want to be part of that, then absolutely come on in. This is the time.”

[Related: Application Security Startup Snyk Raises $300M To Go Global]

McKay said the Series F funding should position Snyk to go public in late 2022 or early 2023 and allow the company to bring in top-tier public investors to set the company up for its next big phase of expansion. Snyk plans to use the money to continue investing aggressively in its product and engineering organization, with the intent of going from four products today to between eight and 10 down the road.

Snyk is most interested in rolling out products that allow developers to be more efficient, see security issues or vulnerabilities within a single pane of glass, and automate the rapid fixing of issues during the software development life cycle, McKay said. From an M&A standpoint, McKay said Snyk now has enough money to go beyond buying technologies and teams and purchase companies with meaningful revenue.

The company is most focused on buying machine learning or development productivity tools and embedding security into them rather than trying to make existing security tools work for developers, McKay said. Technologies that give developers and security teams a complete view of applications and what needs to be improved in an efficient, automated way would be a good fit for Snyk, according to McKay.

From a geographic standpoint, McKay said Snyk kicked up its investment in Europe, the Middle East and Africa (EMEA) in 2020 and has made a major investment in Asia-Pacific and Japan this year. Roughly 30 percent of Snyk’s sales come from outside North America today, and McKay expects to see that figure continue to grow.

As far as the channel is concerned, McKay said Snyk is looking to formalize a lot more of its partner program globally as opposed to approaching it in a regional manner. Snyk is looking to recruit more solution providers in places like Japan, India, Eastern Europe and Latin America, and wants to ensure it has the right enablement in place to be successful, according to McKay.

More than 20 percent of Snyk’s revenue today comes through the channel, and the company works closely with systems integrators like Accenture and Optiv who are assisting their enterprise customers with digital transformation efforts. Snyk is looking for channel partners who are comfortable selling security products to developers and helping them embed it into their software development life cycle.

“That’s not a motion that a lot of the traditional security channel partners understand,” McKay said. It’s a new motion, it’s really turning your traditional market upside down, and not all partners that we talked to get it.”

The company was founded in 2015, employs 735 people and has now raised $775 million, according to LinkedIn. Snyk’s Series F funding consisted of more than $300 million of new capital, with investors spending an additional $230 million to buy existing shares of the company.

The company in March closed a $300 million Series E funding round led by Accel and Tiger Global on a $4.7 billion valuation, meaning that Snyk’s market cap has increased by more than 80 percent over just six months.

Thursday’s funding round propelled the company’s valuation past fellow security upstarts OneTrust and Netskope, making Snyk the world’s second-most-valuable venture-backed cybersecurity vendor, behind only Tanium, which is worth more than $9 billion. Netskope boosted its valuation from $2.8 billion to $7.5 billion after closing a $300 million Series H funding round in July.

The company also snagged Mimecast Chief Revenue Officer Dino DiMarino for the same role at Snyk starting early next month, where he’ll focus on global expansion, building out go-to-market initiatives, and strengthening capabilities in the financial services and federal government verticals. DiMarino spent five years at Mimecast and more than seven years at RSA in regional and global sales leadership roles.

DiMarino isn’t U.S.-centric and gets the nuances of selling in places like France, Germany, Japan and Australia thanks to his time at Mimecast, according to McKay. He knows how to operate the go-to-market engine in an efficient manner and is the right cultural fit for Snyk, McKay said.

“He’s done it at scale in both a private and public environment,” McKay said.

Snyk in 2021 has increased its annual recurring revenue by 154 percent on a year-over-year basis and grown its customer base to more than 1,200 companies, including Asurion, Google, Intuit, MongoDB, New Relic, Revolut and Salesforce. The company has hired and on-boarded 320 employees in the first eight months of 2021 and expects to end the year with more than 800 employees globally.

The company in May acquired Stockholm, Sweden based software composition analysis startup FossID to expand its license compliance and C/C++ capabilities. Snyk has also delivered more than 40 new product features in 2021 as the company looks to address the needs of both legacy as well as modern technology stacks, including open source, containers and infrastructure as code.

“Simply shifting left is no longer enough, and security now needs to be fully owned by developers so that they are equipped to address security issues in real time,” Snyk founder and President Guy Podjarny said in a statement. “Our approach makes security easy so that modern developers are set up for true success, securing what they build without having to become a security expert or slow down.”

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