CrowdStrike Gets $30M In New Round Of Funding
CrowdStrike investors believe industry is ready for a human-focused approach to security problem
Security vendor CrowdStrike received an infusion of $30 million in funding Monday, and investors say they are putting their dollars behind companies that are rethinking the security problem.
In a press release, CrowdStrike announced that it had raised an additional $30 million in Series B financing, led by high-tech venture capital firm Accel Partners and Warburg Pincus.
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CrowdStrike, which has gained wide attention through its focus on identifying adversaries, rather than just the malware they distribute, was not hunting for funding, but the investors made an offer that was too good to pass up, says George Kurtz, president, CEO, and co-founder of the company.
"Accel and Warburg both see an opportunity to redefine the way we think about security," Kurtz says.
Venture firms and other investors say they are looking for companies with a new approach to security because the threat continues to escalate despite rising enterprise investment in existing technology. Kurtz says he receives an average of "five emails a week" from venture funding firms interested in putting their money behind CrowdStrike's approach.
"There are many new startups out there, but only a few actually have a chance to be both independent and category-leading," says Sameer Gandhi, a partner at Accel Partners and now a member of CrowdStrike's board of directors. Accel has invested in a number of security startups, including a $50 million round of financing for Tenable Network Security, maker of the popular Nessus security scanner, in 2012.
Venture firms are attracted to CrowdStrike's story, which focuses on finding and stopping humans, rather than just malware. As part of its offerings, the company delivers data on the source of the attack and is collecting detailed information on malware authors and distributors across the globe.
"There is a perception that malware attacks are growing at a fantastic rate, but if you focus on the adversary, it's a very different picture," Kurtz says. "What we're really seeing is a set of humans trying to beat a set of automated systems, and they're winning. Humans will always be a little ahead of computers -- just look at how IBM's best supercomputer couldn't beat Russia's human champion at chess."
That's the kind of new thinking that attracts investors, Gandhi says. "We have to recognize that the nature of the threat isn't going to get any better," he says. "We look for companies that have a very different approach. It's part of the evolution of technology -- the threat goes beyond the current security infrastructure, and that eventually leads to a new generation of technology. We're always looking for that next generation."
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