Businesses big and small are increasingly storing their data and other IT assets on cloud servers, a move that can augment their operations, but also make them more exposed to cyber attacks.
And that means opportunities for companies like Threat Stack, a Boston-based cybersecurity company that announced today it has raised $45 million in a Series C funding round led by F-Prime Capital Partners and Eight Roads.
“The shift to cloud is possibly the greatest transformational shift in enterprise IT in the last 15 to 20 years,” says Gaurav Tuli, an F-Prime principal, who is joining Threat Stack’s board. “The biggest pain point in that migration to cloud is cybersecurity. [Threat Stack has] a great value proposition.”
Threat Stack’s cloud-based software helps customers continuously monitor and respond to attacks across their servers, whether they’re based in private, public, and/or hybrid cloud infrastructures. The company says its software can replace fragmented security products from other vendors and help reduce complexity in an organization’s security measures.
The startup’s approach seems to be resonating in the market. Threat Stack CEO Brian Ahern (pictured above) says his company has been growing quickly since closing a $15.4 million Series B round in April 2016. He declined to share exact revenues, but he says Threat Stack now serves more than 350 customers, including MuleSoft, Acquia, and SessionM.
“Threat Stack has really been aggressively investing to capitalize on the fantastic market opportunity that sits in front of us,” Ahern says. “Our intention is to continue to invest to take advantage of that opportunity.”
Much of the spending has been on hiring. Threat Stack has grown from 50 employees at the end of last year to around 100 people currently, with plans to roughly double its staff again over the next year or so, Ahern says. The hires are across research and development, as well as sales and marketing, he explains.
Next year, Threat Stack will start targeting customers in international markets, something that these new investors should be able to help with, Ahern says. F-Prime—a venture capital firm affiliated with Fidelity Investments—has offices in Cambridge, MA, and London, according to its website. Eight Roads, a fund associated with F-Prime, has overseas offices in the U.K., China, Japan, India, and Bermuda, a spokeswoman says.
Other investors in the round include earlier Threat Stack backers Scale Venture Partners, .406 Ventures, and Accomplice. The startup has raised over $70 million total from investors.
Five-year-old Threat Stack was born in Washington, D.C., but it moved to the Boston area in 2013. It’s an alum of the now-defunct Techstars Cloud startup accelerator program in San Antonio, TX. The company’s founders include Jen Andre, who went on to start Komand, another Boston-area security company that was acquired this year by Rapid7.
Threat Stack takes a more modern approach to security, compared with older, more traditional players that emerged before businesses started migrating to cloud servers. The company says its software capabilities include assessing vulnerabilities and detecting anomalous activity, both from outside and within the customer’s IT systems. Its offerings appear to have some things in common with security companies like Cybereason, Alien Vault, and Coronet, to name a few.
Threat Stack fits into several themes in cybersecurity, including an emphasis on software tools that automate security tasks, and attempting to unify security offerings.
Threat Stack intends to invest more in data analytics tools to better understand an organization’s IT weak spots and to predict attacks, says Tuli, the F-Prime investor.
“The sophistication of hackers is growing exponentially,” Tuli says. “How do you adapt to that?”
