Feb
17
2021
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vArmour, the multi-cloud security startup, raises $58M en route to IPO

Enterprises have been loading more of their operations into cloud — and, more often than not, multi-cloud — environments over the last year, creating vast networks of services that can be complex to manage. Today, vArmour, a startup that provides ways to manage in real time and ultimately secure how applications (and people) work in those fragmented environments, is announcing funding to capitalize on the demand for its services.

The Bay Area startup has picked up funding of $58 million in what it described as an oversubscribed round. Co-led by previous backers AllegisCyber Capital and NightDragon, existing investors Standard Chartered Ventures, Highland Capital Partners, Australian carrier Telstra, Redline Capital and EDBI also participated.

CEO Tim Eades (who co-founded the company with Roger Lian) said this round is likely to be its final fundraising ahead of an IPO for the company.

“We had one hell of a year in 2020 with companies rushing to the cloud,” he said in an interview, with net new annual recurring revenue doubling year over year in the last year. It started out, he noted, with perhaps 10% of business processes in the cloud, and ended at more like 50%. “Now the focus for us is to get to the public markets, maybe in two or 2.5 years from now.”

The company appointed a CFO last October as part of its go-public plan, he noted — Chris Dentiste, who previously had been the CFO of RSA. “His job is to help me find the right window. My job is to make sure we have enough fuel in the tank, and we do,” said Eades.

He added that the company is likely also to look at making some acquisitions in the meantime. A recent launch of an AI lab in Calgary, Canada, points to one area where we might see some activity.

The company is not disclosing its valuation, although Eades confirmed it was a significant up-round. It has raised $197 million to date.

For some context, in the last round of funding that we covered — a $44 million round in 2019 led by the same two investors — we mentioned a PitchBook estimate of $420 million from the previous round — a figure that the company did not dispute with us at the time.

VArmour has been around for several years, with the first three spent in stealth mode, quietly building its technology, raising money and amassing early customers. Those customers, Eades said, fall into categories like telecommunications (strategic backer Telstra being one of them), and financial services.

Those industries speak largely to the challenges that vArmour is addressing in its business.

Legacy businesses in critical verticals often pre-date the modern era of business, and while many of them are going through what enterprise people like to refer to as “digital transformation”, the evolution is not a smooth one.

In many cases, adopting new technologies can be slow, and in almost every case, when you are talking about large enterprises, the changes are very piecemeal, affecting one particular service, or region, or department, or even a subsection of any of those.

All of this means that for malicious actors, there are a number of options to tackle when setting out to look for vulnerabilities in a business or its network, and for those on the inside, it makes for a very complicated and fragmented situation when it comes to monitoring those networks and the services running on them, finding vulnerabilities or suspicious activity, and doing something about that. VArmour’s term that it uses for this is “Application Relationship Management.”

Eades — whose background includes working for the likes of IBM but also leading a number of startups acquired by bigger technology giants — has first-hand understanding of how that complexity looks from both sides, from the end user end and from the service provider end. That is in essence what his company has identified and is trying to fix.

Having started out in managing application policies and providing insights to protect on that front, the company is expanding the range of tools that it provides with the recent launch of identity access management on top of that.

But that is likely to be just one of the product steps that it takes to tackle what remains a difficult problem to fix, as its growth is related not just to the growth of activity on a network, but further digital migration of services, and the rise of new technology within an organization’s stack.

(And that is also an area that vArmour is not alone in considering, or even the only approach to tackling it: consider yesterday’s news of Palo Alto Networks acquiring Bridgecrew to extend its own ability to provide automated security monitoring services to DevOps teams.)

“Managing risk and resiliency in the hybrid cloud is one of the most significant security challenges for enterprises,” said Bob Ackerman, founder and managing director at AllegisCyber Capital, in a statement. “vArmour’s platform provides the visibility, controls, and accountability necessary to actively manage these challenges and has done this for hundreds of customers. We are ecstatic to be part of their next stage of growth.”

“As applications become more complex, more distributed, and more targeted by attackers, the importance of full visibility into the relationships between applications becomes increasingly important,” added Dave DeWalt, founder of NightDragon. “vArmour’s approach to application relationship management ensures that enterprises of all sizes can continuously audit, respond, and control identity relationships to best protect their important IP, and mitigate risk to the business.”

Feb
06
2019
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vArmour, a security startup focused on multi-cloud deployments, raises $44M

As more organizations move to cloud-based IT architectures, a startup that’s helping them secure that data in an efficient way has raised some capital. vArmour, which provides a platform to help manage security policies across disparate public and private cloud environments in one place, is announcing today that it has raised a growth round of $44 million.

The funding is being led by two VCs that specialise in investments into security startups, AllegisCyber and NightDragon.

CEO Tim Eades said that also participating are “two large software companies” as strategic investors that vArmour works with on a regular basis but asked not to be named. (You might consider that candidates might include some of the big security vendors in the market, as well as the big cloud services providers.) This Series E brings the total raised by vArmour to $127 million.

When asked, Eades said the company would not be disclosing its valuation. That lack of transparency is not uncommon among startups, but perhaps especially should be expected at a business that operated in stealth for the first several years of its life.

According to PitchBook, vArmour was valued at $420 million when it last raised money, a $41 million round in 2016. That would put the startup’s valuation at $464 million with this round, if everything is growing at a steady pace, or possibly more if investors are keen to tap into what appears to be a growing need.

That growing need might be summarised like this: We’re seeing a huge migration of IT to cloud-based services, with public cloud services set to grow 17.3 percent in 2019. A large part of those deployments — for companies typically larger than 1,000 people — are spread across multiple private and public clouds.

This, in turn, has opened a new front in the battle to secure data amid the rising threat of cybercrime. “We believe that hybrid cloud security is a market valued somewhere between $6 billion and $8 billion at the moment,” said Eades. Cybercrime has been estimated by McAfee to cost businesses $600 billion annually worldwide. Accenture is even more bullish on the impact; it puts the impact on companies at $5.2 trillion over the next five years.

The challenge for many organizations is that they store information and apps across multiple locations — between seven and eight data centers on average for, say, a typical bank, Eades said. And while that may help them hedge bets, save money and reach some efficiencies, that lack of cohesion also opens the door to security loopholes.

“Organizations are deploying multiple clouds for business agility and reduced cost, but the rapid adoption is making it a nightmare for security and IT pros to provide consistent security controls across cloud platforms,” said Bob Ackerman, founder and managing director at AllegisCyber, in a statement. “vArmour is already servicing this need with hundreds of customers, and we’re excited to help vArmour grow to the next stage of development.”

vArmour hasn’t developed a security service per se, but it is among the companies — Cisco and others are also competing with it — that are providing a platform to help manage security policies across these disparate locations. That could either mean working on knitting together different security services as delivered in distinct clouds, or taking a single security service and making sure it works the same policies across disparate locations, or a combination of both of those.

In other words, vArmour takes something that is somewhat messy — disparate security policies covering disparate containers and apps — and helps to hand it in a more cohesive and neat way by providing a single way to manage and provision compliance and policies across all of them.

This not only helps to manage the data but potentially can help halt a breach by letting an organization put a stop in place across multiple environments.

“From my experience, this is an important solution for the cloud security space,” said Dave DeWalt, founder of NightDragon, in a statement. “With security teams now having to manage a multitude of cloud estates and inundated with regulatory mandates, they need a simple solution that’s capable of continuous compliance. We haven’t seen anyone else do this as well as vArmour.”

Eades said that one big change for his company in the last couple of years has been that, as cloud services have grown in popularity, vArmour has been putting in place a self-service version of the main product, the vArmour Application Controller, to better target smaller organizations. It’s also been leaning heavily on channel partners (Telstra, which led its previous round, is one strategic of this kind) to help with the heavy lifting of sales.

vArmour isn’t disclosing revenues or how many customers it has at the moment, but Eades said that it’s been growing at 100 percent each year for the last two and has “way more than 100 customers,” ranging from hospitals and churches through to “8-10 of the largest service providers and over 25 financial institutions.”

At this rate, he said the plan will be to take the company public in the next couple of years.

May
24
2016
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Multi-cloud security startup vArmour raises $41M more, led in part by Telstra

securityicons Cybercrime is a rising problem — expected to cost organizations between $500 billion and $2 trillion by 2019. Now a startup that has built what it markets as an economical tool to fight cybercrime has raised some money to help it grow. vArmour — a startup that offers security solutions specifically aimed at enterprises that run services and apps across multiple clouds —… Read More

Aug
20
2014
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In Year 3 Of Stealth Mode, Enterprise Security Startup vArmour Raises Another $36M

7669364104_51cc025774_k vArmour, a security startup that has been in stealth mode for the past three years, is today announcing not one but two more rounds of funding as it finally gears up for a launch later this year. The startup, based out of Mountain View, has raised $36 million in Series B and Series C rounds. The first of these, a $15 million tranche from December 2013, was led by Menlo Ventures (which has led… Read More

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