4/12/2019
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This Week in Security Funding: Where the Money Went

Predictions for cybersecurity investment in 2019 are holding true with funding announcements from four startups.



Cybersecurity startups Expanse, Armis, Bitglass, and Tufin announced financial news during a busy week for industry funding, giving a peek into the technology that is top-of-mind for investors.

The security market, expected to grow 8.7% and reach $124 billion in 2019, has been rife with funding activity. Venture capital investments hit a record high of $5.3 billion in 2018, about 20% more than the $4.4 billion in 2018 and 81% higher than in 2016. Experts say this rate of investment is unsustainable; however, security firms will continue to receive funding in 2019 and beyond.

But which ones? It's tough to predict the security startups that will stick around for the long term. This week helped shed some light on which tech they think has the most potential now.

Let's start with Expanse, a Bay Area startup formerly called Qadium, which this week announced $70 million in Series C funding. The company indexes global IP addresses with the goal of providing governments and large organizations with visibility into their "global Internet attack surface." The startup has its roots in government: Co-founders Tim Junio, previously with the CIA, and Matt Kraning met at DARPA, where they first launched the security research lab Qadium that later became Expanse.

Expanse monitors activity linked to more than 400 million public IPs; customers include the US Department of Defense, Department of Energy, CVS, and PayPal. Its latest funding round was led by TPG Growth, with participation from NEA, IVP, Founders Fund, and MSD Capital. It also received investment from Peter Thiel, Arianna Huffington, Taylor Glover, and Sam Palmisano.

Enterprise Internet of Things (IoT) security firm Armis Security snagged $65 million in Series C investment and reported 700% growth in the past year. Founded in 2015, it offers an agentless IoT security tool created to help organizations view and control unmanaged IoT devices. The system monitors devices on the network and analyzes their behaviors to identify risks and potential attacks.

IoT is a growing security concern for businesses, and it seems investors think Armis can help meet their needs. Sequoia Capital led its Series C funding round with participation from Insight Venture Partners and Intermountain Ventures, as well as Bain Capital, Red Dot Capital Partners, and Tenaya Capital as return investors. Its latest round brings Armis' total funding to $112 million.

Cloud security company Bitglass secured $70 million in Series D funding from new investor Quadrille Capital and current investors Future Fund, New Enterprise Associates (NEA), Norwest, and Singtel Innov8. Its latest round brings total funding to $150.1 million since it was founded in 2013. It plans to leverage the additional funds to continue growing its position within the cloud access security broker (CASB) market.

In other financial news, Tufin Software saw its stock rise more than 30% in its first day of trading. The Israeli security company sold 7.7 million shares priced at $14 each to raise at least $107.8 million at an initial valuation of about $454 million. The money will go toward research and development, as well as adding more people to Tufin's marketing and sales teams.

Tufin, headquartered in Boston and Tel Aviv, calls itself a security policy company, focused on how businesses manage security and network infrastructure. Its security policy management platform aims to help organizations implement and enforce policies across networks.

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Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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