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Thursday, September 23, 2021

As Cyberattacks Surge, Security Start-Ups Reap the Rewards

IDBS ART GALLERY

Mr. Chandna, the Greylock venture capitalist, introduced the chief executive of Abnormal Security, an email security company in which he had invested, to another investor on a Friday evening in October, according to him. Mr. Reiser received an email from one of the investors, Venky Ganesan of Menlo Ventures, who had been pursuing a meeting with the company’s chief executive, Evan Reiser, for months. Mr. Reiser accepted the invitation to dinner that evening.

Mr. Reiser drove from San Francisco to Mr. Ganesan’s home in Atherton, Calif., which is about 30 miles away, according to him. Abnormal had signed a deal to raise $50 million at a valuation of $600 million by the end of the weekend, bringing the company’s total funding to $74 million. Menlo’s $40 million check represented the company’s largest investment to date.

In terms of shotgun weddings, Mr. Ganesan said, “it’s about as shotgun as you can get.”

Since then, the ransomware attacks have provided an additional impetus to the funding wave.

Lacework, a cloud security start-up based in San Jose, Calif., received $525 million in funding in January of this year. As a result of the products offered by Lacework, which employ artificial intelligence to identify threats, said Andy Byron, the company’s chief resource officer, the company has received interest from investors. Since its inception in 2015, Lacework has raised a total of $625 million in funding.

Getting additional investors to participate, according to Mike Speiser, a venture capitalist at Sutter Hill Ventures, which led Lacework’s January financing, was not a problem, according to him.

“I called the five people who I considered to be the most qualified investors and asked them if they were interested in participating. They were all interested, and we were able to close the deal within 48 hours,” Mr. Speiser explained. The majority of the people I spoke with expressed a desire to participate. We could have raised significantly more than $1 billion.”

Lacework has seen a significant increase in business as a result of “the combination of all of these ransomware and nation-state attacks, as well as people moving to the cloud so aggressively,” according to David Hatfield, who joined the start-up as chief executive in February.

source

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