Summer Of Security: 15 Hot Startups That Reeled In Funding

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Security startups weren't wasting away their summer lounging on a sunny beach, instead they were actively reeling in billions of dollars in cumulative venture capital investments. Since June, VCs have poured millions of dollars at a time into security startups that are working to revolutionize the way businesses approach security, with hot new technologies to secure containers, applications, the network, the cloud and more. While the wait for the next security startup to land funding probably won't be that long, take a look back at companies that have landed funding in the past couple of months.


Tanium landed not one, but two rounds of funding in recent months. The Emeryville, Calif.-based company first landed $52 million in funding in March on the heels of astronomical billings and transaction growth for its endpoint management and security solution. Not far behind was an additional $120 million in funding at the beginning of September, which reportedly put the startup's valuation at $3.5 billion. The rounds involved investments from Andreessen Horowitz, TPG Capital, Institutional Venture Partners and T. Rowe Price Associates. Both investments involved massive influxes of funding into the company's channel program, co-founder and CTO Orion Hindawi told CRN at the time, including hiring more channel account managers.


In August, AlienVault landed $52 million in late-stage Series E funding from Institutional Venture Partners, Trident Capital, Kleiner Perkins Caufield & Byers, and GGV Capital. Based in San Mateo, Calif., AlienVault offers a UTM platform called Unified Security Management as well as a crowd-sourced threat detection and intelligence network called Open Threat Exchange. The company has been on a rapid growth trajectory in recent months, citing 65 percent year-over-year bookings growth and 75 percent new customer growth, and the new funding will fuel sales and marketing efforts to tackle the "high velocity" of demand the company sees in its target market as well as product innovation, CEO Barmak Meftah told CRN at the time.


In yet another triple-digit funding for the security industry this summer, Zscaler landed $100 million in Series B funding in August from TPG, EMC and Lightspeed Ventures. Zscaler is a security company that says it is looking to bring cloud computing to Internet security, with offerings to use a multitenant, distributed cloud computing platform for integrated firewalls, Web security, mobile security, the Internet of Things, data loss prevention and more. Founded in 2008, the company now handles more than 15 billion Internet requests and stops more than 100 million cyberthreats a day. The San Jose, Calif.-based company said at the time that it will put the latest round of funding to continue growing and hopefully go public in the near future.


Endpoint security is seeing a resurgence in the security market, and Irvine, Calif.-based Crowdstrike is one of the startups at the forefront of the market with its next-generation endpoint security platform, Falcon Host. The company's solution is a Software-as-a-Service offering that focuses on identifying what it calls "indicators of attack" instead of "indicators of compromise." The company also offers a threat intelligence and DNS security solution. The company landed $100 million in Series C in July from Google Capital, Rackspace, Accel and Warburg Pincus, which CEO George Kurtz said at the time would be put toward gaining new customers and expanding the company further into Europe and Asia-Pacific by, largely, investing "aggressively" in its channel program.


Yet another next-generation endpoint security company landing big-bucks funding this summer was Cylance, which announced $42 million in Series C funding in July from DFJ Growth, KKR, Dell Ventures, CapitalOne Ventures and TenEleven Ventures. Based in Irvine, Calif., Cylance offers a solution that does away with signature-based technology used by traditional endpoint security vendors, instead using mathematics and algorithms to pinpoint suspect behavior on the endpoint. The new funding will be used to accelerate sales and marketing initiatives, which CEO Stuart McClure said will accelerate the company's already astronomical growth (Cylance grew 400 percent over last year).


In one of the highest valuations on this list, Palantir landed $450 million in funding in July. Based in Palo Alto, Calif., Palantir offers a data analytics solution that it sells to both government as well as private companies to help them tie databases together to search for information. While it has uses other than security, the company says its solution can be used to aggregate and mine disparate threat alerts and detect advanced threats, leaving security professionals to tackle more preventative security updates instead of just responding to alerts.

BitSight Technologies

For companies that want to get an idea of where their security performance stands, BitSight Technologies offers a solution to rate the performance of internal systems, and even those of peers, competitors and possible acquisition targets. The company uses publicly accessible information, such as threat intelligence, data hygiene and publicly disclosed breaches to create a security ranking for the company. The Cambridge, Mass.-based startup raised $23 million in Series B funding in June from Comcast Ventures, Menlo Ventures, Globespan Venture Partneres, Commonwealth Capital Ventures, Shaun McConnon (the company's CEO) and Flybridge Capital Partners. The company is putting the funding toward growing into the Europe and Asia-Pacific markets as well as growing its channel program.


Application companies are becoming more aware of their need to build in security best practices from the start. Checkmarx offers a solution for them to do that, with a way for software developers to check their code using artificial intelligence replication and make sure it is clean of vulnerabilities before launching to the PC or mobile device. The company raised $84 million in Series D funding in June led by Insight Ventures, adding to the $15 million it had raised in previous rounds. CEO Emmanuel Benzaquen said at the time that the funding would be put toward providing liquidity to early investors as well as "taking the company to the next level" with global expansion and rapidly expanding its headcount.


In yet another sign of funding flowing into the endpoint security market, CounterTack landed $15 million in Series C funding in June from TenEleven Ventures, EDBI and existing investors. CounterTack's Sentinel is an endpoint threat detection and response solution that uses big data to identify and respond to advanced persistent threats. CounterTack said it would funnel the money into accelerating its go-to-market strategy, especially around SMBs and partnerships with managed security service providers.


Calling itself the first cybersecurity company for the Internet of Things, Bastille landed $9 million in Series A funding in August for its threat detection and mitigation platform for IoT systems. Currently in pilot and slated for general availability in early 2016, Bastille said its platform will use next-generation sensors and software to detect, localize and access security threats. The timing couldn't be more appropriate for the company's launch, with concerns around security, the Internet of Things and connected devices at an all-time high.


Waltham, Mass.-based Cryptzone landed $15 million in Series B funding in June, led by Kayne Partners and with participation from Medina Capital and other limited partners. Cryptzone focuses on cloud and network security with its context-aware security solutions that use gateways, data protection, email security and compliance solutions to protect an organization from both internal and external threats. The company said at the time that it would use the new funding to accelerate its go-to-market strategy as well as continue to invest in expanding its product development.

Menlo Security

Menlo Security emerged from stealth with a bang in June, landing $25 million in Series B funding from Sutter Hill Ventures, General Catalyst, Osage University Partners and Engineering Capital. The company had previously raised $10.5 million in its Series A round. The Menlo Park, Calif.-based startup offers a platform that isolates all Web and email content in the cloud before it reaches the endpoint. Menlo Security takes a different approach than most security solutions, isolating both good and bad content in the cloud instead of trying to decide the difference between the two. From there, it delivers a mirror presentation of the content to the end user, which preserves the end-user experience while simultaneously preventing the content from reaching them.


Venafi secures cryptographic keys and digital certificates, a role it calls the "Immune System for the Internet." By protecting the keys and certificates, Venafi prevents attackers from impersonating or monitoring a company's infrastructure, systems and communications that could lead to a serious breach. The company, based in Salt Lake City, landed $39 million in funding for its efforts in June, from QuestMark Partners, Intel Capital and Silver Lake Waterman to accelerate the Venafi Trust Protection Platform and grow its customer base.

Nok Nok Labs

Nok Nok Labs is a Palo Alto, Calif.-based security startup that develops client and server software to take advantage of strong authentication technologies on mobile devices and other sensors. The company landed $8 million in additional Series C financing in August, bringing its total raised in the round to $16.25 million. The funding was from DaouKiwoom Group, Docomo Capital, Thundersoft, DCM Ventures, Lenovo Group, Onset Ventures and Raven Ventures. The funding will be put toward expanding sales and channel infrastructure as well as continuing to grow its product line, the company said at the time.


Endpoint security startup Barkly raised $12.5 million in Series A financing in June from New Enterprise Associates and Sigma Prime Ventures, bringing the company's total funding raised to $17 million. The company, based in Boston, offers a solution that uses both a local agent, SaaS-based reporting and management, and behavioral analytics to combat security threats on the endpoint. The company's solution is expected to be available in first-quarter 2016 and said the funding will be put toward increasing headcount, product development and growing sales.