It’s been one hell of a year for Netskope.
Back in July we reported on their acquisition of Sift Security, one of the pioneers of next-gen cloud infrastructure safety who use machine learning to detect and prevent breaches in cloud computing environments like Amazon Web Services, Microsoft Azure and Google Cloud.
Barely four months later, and despite CEO Sanjay Beri saying last year after a $100m (£77.7 million) raise he’d never again seek funding, Netskope have closed their latest round, raising $168.7 million (£131.1 million) in a Series F round which propels them into the Unicorn Club.
If you don’t already know, the Unicorn Club is a growing list of companies defined by www.techcrunch.com as ‘US-based software companies started since 2003 with a valuation of over $1 billion’ and Beri says that the money will be used to ‘expand sales, research and development and data centres.’ It’s a huge jump from the $525 million post-money valuation after last year’s $100 million raise.
With over 600 employees at it’s new state-of-the-art HQ in Santa Clara, the billion-dollar business isn’t, according to Beri, focused on making money.
He was quoted in an interview with Fortune magazine saying ‘to be frank, profitability isn’t our focus right now’, emphasising the company’s plans to pour the new money onto R&D, sales and marketing and further acquisitions. ‘You innovate or you die in security.’
‘We initially didn’t set out to raise a new round, but in conversations with our investors, we realized we could double down on scaling and supporting our ambitious global growth plans even faster with additional investment.’
Sanjay Beri, Netskope CEO
After raising almost $400 million over six funding rounds (including the latest round), working with over 25% of Fortune 100 companies to secure their data, web apps and cloud infrastructure and propelling Netskope into the big-time, Beri is looking at going public. ‘An IPO is definitely on our trajectory’ but he claims to have no timeline for such a filing.
Lightspeed Venture Partners, one of Netskope’s long-standing investment partners, have been on board since 2013 are bullish about the company’s future prospects. Partner and Netskope board member Arif Janmohamed first met Beri when the two worked as engineers at various California tech start-ups during the 90s dotcom boom and he sees a $17 billion (£13.2 billion) market opportunity for Netskope, which amounts to the IT spend for securing corporate networks ‘on premise,’ a segment he expects will shift to the cloud.
Janmohamed went on to say that ‘A huge amount of market cap is shifting from behind the firewall apparatus into the cloud’, adding that ‘the first derivative of any application stack is security.’
It’s Not All About The Money
It’s partly about the money but it’s also about recognition. Last month we wrote about the Gartner Magic Quadrant and Netskope has been recognised as a Leader for Cloud Access Security Brokerage. Not only that, the company is positioned furthest for its completeness of vision taking in 13 vendors across 15 different criteria.
The usual corporate guff followed – ‘We are delighted to be recognized again as a Leader positioned furthest for completeness of vision and believe this recognition from Gartner validates our leading technology, “one-cloud” architecture, the breadth of our offering, and the long-term vision of our company.’
While being recognised as the leading player in a field of hugely innovative cloud security businesses is a great boon for a company that was only formed six years ago and the report goes on to say that ‘Cloud access security brokers have become an essential element of any cloud security strategy, helping organizations govern the use of cloud and protect sensitive data in the cloud. Security and risk management leaders concerned about their organizations’ cloud use should investigate CASBs.’
While we wait patiently for our own $1 billion valuation, we’ll continue to eulogise about cloud security and as the world’s biggest businesses rely on Netskope to secure their IT and to develop a fully collaborative workforce, you can too.
Have a good week.