Sysdig Raises $188M To Take On Palo Alto Networks In Cloud

‘We’re seeing the birth of a giant market, and now is the time to capitalize on our leadership and build on that momentum,’ says Sysdig CEO Suresh Vasudevan as the company notched a $1.19 billion valuation.


Sysdig closed its Series F funding round and notched a $1.19 billion valuation to further strengthen its position against Palo Alto Networks in the cloud.

The San Francisco-based container security vendor said Palo Alto Networks is present in the majority of cloud deals where Sysdig prevails, with customers choosing the upstart over the platform security giant thanks to Sysdig’s ability to deliver unified container and cloud visibility from a single application, CEO Suresh Vasudevan said. The $189 million round brings Sysdig’s total funding to $394 million since 2013.

“None of the incumbent vendors that have a very traditional mindset of security born around implementing firewalls and implementing more traditional server-based security solutions are ready for this modern shift,” Vasudevan told CRN. “This war is going to be won by startups, and Sysdig is one of the best-positioned companies.”

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[Related: Former Nimble CEO Becomes New Leader Of Open-Source Container Vendor Sysdig]

Palo Alto Networks has built its cloud security portfolio almost entirely through acquisition, Vasudevan said, buying Twistlock for container security, RedLock and for public cloud configurations, and Bridgecrew for infrastructure configuration. As a result, Vasudevan said the information is decoupled for customers, forcing them to hunt for information across different products after logging into the system.

In contrast, Vasudevan said Sysdig customers can set policies around investigating and detecting cloud threats as well as view any threats that have been detected from a single modern application, giving them a single unified view. Palo Alto Networks declined to comment on Vasudevan’s remarks.

In addition, Vasudevan said Palo Alto Networks is accustomed to selling to the CISO’s office while security itself is getting more and more integrated into the DevOps process. In contrast, Vasudevan said Sysdig leverages open source technology to drive developer adoption and make sure security teams are comfortable as projects are embedded into the DevOps lifecycle.

“It’s a very different approach from Twistlock, RedLock, Bridgecrew and Palo Alto itself,” he said. “Open source allows your policies to be transparent, open source allows the community to innovate much faster, open source is the way that modern DevOps products are built. Whereas a lot of traditional security companies come with much more of a closed mindset. These acquisitions don’t change that.”

Sysdig also benefits from being born as a SaaS-first company rather than having to transition from on-premise software in the container security space to building out SaaS over the past year like Palo Alto Networks, Vasudevan said. The company already has a presence and partnerships in the U.S., Europe, Australia, and Japan, allowing customers to transition to SaaS while still retaining their data locally.

“We’re seeing the birth of a giant market, and now is the time to capitalize on our leadership and build on that momentum,” Vasudevan said.

Sysdig’s Series F funding round by led by Third Point Ventures and Premji Invest, and Vasudevan said the company plans to use the proceeds to boost its engineering and R&D presence in Spain and Italy to keep strengthening its container and cloud security product lines. Sysdig has more than 100 channel partners with expertise in security, cloud and DevOps, and wants to more than double its sales capacity in 2021.

In terms of go-to-market metrics, Vasudevan said Sysdig is most interested in customer acquisition and net revenue expansion, specifically around rate of acquisition and footprint growth for existing clients. Sysdig plans to watch pace of innovation and feature delivery to make sure the company is staying one-to-two years ahead of the competition, and will track the development of its open-source community.

“Four years ago, when I first started looking at the space in earnest, I would say most of the traditional channel community looked at this as something that they need to worry about, but not yet something that is relevant to them,” Vasudevan said. “It is remarkable how much that has changed.”