As Cyberattacks Surge, Security Start-Ups Reap the Rewards
On a Friday evening in October, Mr Chandna, the Greylock venture capitalist, introduced the CEO of a messaging security company he had invested in, Abnormal Security, to another investor, he said. declared. That investor, Venky Ganesan of Menlo Ventures, who had been seeking a meeting with CEO Evan Reiser for months, immediately emailed Mr Reiser inviting him to dinner that evening.
Mr. Reiser drove, he said, from San Francisco to Mr. Ganesan’s home in Atherton, Calif., About 30 miles away. By the end of the weekend, Abnormal had signed a deal to raise $ 50 million at a valuation of $ 600 million, bringing its total funding to $ 74 million. Menlo’s $ 40 million check was the biggest investment the company has ever made.
“As shotgun weddings go on, it’s as pump-action as possible,” Ganesan said.
Since then, ransomware attacks have given new impetus to the fundraising wave.
In January, Lacework, a cloud security startup in San Jose, Calif., Raised $ 525 million in funding. Investors have reached out because of Lacework’s products, which use artificial intelligence to identify threats, said Andy Byron, the company’s chief resources officer. In total, Lacework has raised $ 625 million since its inception in 2015.
Mike Speiser, a venture capitalist at Sutter Hill Ventures who led the funding for Lacework in January, had no problem engaging other investors, he said.
“I called the five people I thought were the best investors and asked them if they were interested. They were all interested and within 48 hours we made a deal, ”Speiser said. “100% of the people I called said they wanted to participate. We could have raised over a billion dollars. “
Business has exploded for Lacework due to “the combination of all this ransomware and nation-state attacks, plus people moving so aggressively to the cloud,” said David Hatfield, who joined the start-up in February as Managing Director.
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