CipherCloud Raises $30M From Andreessen Horowitz For Cloud Encryption Technology

CipherCloud has raised a new $30 million round of funding from Andreessen Horowitz for its cloud application security technology. The investment follows a previous seed round from Andreessen for $1.4 million.

Founded in 2011, CipherCloud has already had phenomenal success. The company has more than 1.2 million users and 40 customers, including two of the world’s top banks.

Founder Pravin Kothari, who previously sold security company ArcSight to Hewlett Packard for $1.6 billion, said in an interview that the core value of the technology comes from the capability to encrypt data before it leaves the enterprise. The communication then passes through a gateway that “tokenizes,” the data. The real data is cached in the enterprise. According to the website, what is sent out are “tokens that are structurally similar to the actual data, but have no mathematical correlation. These tokens preserve operations such as searching, sorting and reporting within cloud applications.”


CipherCloud partners with cloud services such as, Microsoft Cloud, Amazon Web Services, Box, and Google.

CipherCloud faces competition from the likes of Symantec and McAfee. But the difference is in the encryption. Companies like Symantec secure at the browser level, which makes for difficult implementation. CipherCloud uses a single key encryption that is used for the entire enterprise.

CipherCloud maintains the vulnerability of data will propel its business. Petraeus-gate and the exposure of Gmail and other cloud services to law enforcement subpoenas. The examples are numerous but the real opportunity executives say “comes from the tension between the extraordinary opportunity to use the cloud to lower costs and speed time-to-market and its myriad risks. These range from threats of data breaches by hackers or hactivists to seizure of documents by law enforcement to compliance with privacy and data protection regulations.”

Gartner predicts that 25% of enterprises will use a cloud security app like CipherCloud by 2016 in a market poised to reach $206.6 Billion. That clarifies one thing that is as true in the enterprise software world as it is in the cloud: the money is in security.