JMI Equity, IGC Sink $31M for Strategic Growth at WhiteHat Security

WhiteHat Security, the Santa Clara, CA-based Web security company founded in 2001 by Jeremiah Grossman, has closed on $31 million in funding from a new investor, JMI Equity, and Investor Growth Capital, an existing investor. Both firms specialize in expansion stage investments in IT companies.

In a statement today, WhiteHat says it secures the Web applications of some of the largest global brands. The company says its new customer bookings grew by more than 75 percent, year-over-year, and it has a better than 95 percent customer retention rate. The funding is intended to accelerate the sales and marketing effort behind WhiteHat’s recently launched Sentinel Mobile and Sentinel Source products, gain inroads among enterprise customers, and to expand internationally, among other things.

The deal highlights the tremendous growth in security technology for Web applications. In its announcement today, WhiteHat cites research estimating the aggregate application security market will reach $1 billion by next year, with dynamic application security testing amounting to $453 million.

WhiteHat says its recently launched Sentinel Mobile extends the company’s security technology to mobile platforms, while Sentinel Source is intended to ensure the security of Web applications from inception.

Peter Arrowsmith, a general partner at JMI Equity in San Diego, is quoted in the statement saying, “Web application vulnerabilities are rising at an alarming rate in recent years and can have a dramatic impact on a company’s business and reputation. WhiteHat’s holistic approach to security throughout the software development lifecycle—from source code through completed production application—provides an advantage that few security providers can achieve. We believe that this approach differentiates WhiteHat as a true leader in the application security space, and we are pleased to partner with the company as it continues to meet a critical market need.”

Brian Mulvey, a vice president with Investor Growth Capital in New York, joined the board at WhiteHat last year, following an $8 million investment the firm made in 2011. IGC managing director Philip Dur, who is based in Menlo Park, CA, also oversees the firm’s investment in WhiteHat.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.