Lookout, a mobile security product that to this point has been mostly geared towards consumers, announced today they had snagged $150M in Series F funding to begin focusing on enterprise customers.
The round was led by investment funds managed by T. Rowe Price Associates, Inc., and includes participation from new investors Morgan Stanley Investment Management, Wellington Management Company, LLP, Goldman Sachs and Bezos Expeditions. Existing investors Mithril Capital Management, Khosla Ventures, Accel Partners, Index Ventures and Andreessen Horowitz also contributed. The investment brings total funds raised to $282M to date.
It’s an interesting mix and the focus on traditional Wall Street investors is a bit of a departure from the usual VC backers in the Silicon Valley.
Lookout claims 50M users worldwide (with a vague “millions” in paid subscribers) and CEO Jim Dolce, says part of the reason for raising the money in this round is to get to 100M users fast. Right now, they are primarily a consumer app available in the Apple and Android app stores. They are also available from a number of cell phone providers in the US and EU, but they were looking for a way to expand their reach, and the enterprise seemed like the next logical step.
The company has been around for seven years, so in many ways it predates many of the trends and issues in place today, but John Hering, co-founder & executive chairman at Lookout says they had a vision for security when they started out that would change the way we secure devices, whatever came along.
Instead of focusing on people, which clearly hasn’t worked, the company uses algorithms and back-end monitoring to protect the device from external threats. “We are focusing on bringing presence and integrity to the mobile experience. The data, the urls you are visiting, that’s what we are protecting and you can be confident we are doing it in a way that’s light-weight and you don’t have to think about,” Hering explained.
He offers ransomware attacks as a recent example. In these types of attacks, the intruder gets control of your device and forces you to pay ransom to get control of it back. Using Lookout should prevent such an attack, Hering says, because the product collects data on the threat from its network and the product learns how to neutralize it.
Hering explained the more users they have, the more data they can collect about threats, and the more effective their protection will be. The network effect actually makes the protection stronger. He’s careful to point out they never collect any personal data. Their only interest is threat protection.
I downloaded the free iPhone version, and found it monitors your phone for malware and has a mechanism not unlike Find My iPhone that will help you locate your phone if it’s lost or stolen. It takes it a step further letting you call or text the phone or send a loud scream meant to annoy the thief. The free version also backs up your contacts and if you pay a fee you can back up your photos and get theft alerts.
CEO Dolce says the next logical step is to take this technology into the enterprise. He doesn’t see this necessarily requiring a major overhaul of the consumer software, so much as adding bits and pieces to make it easier to monitor and manage from an IT viewpoint. IT obviously requires backend monitoring tools that provide a broad overview of what’s going on in the product and the enterprise likely requires more sophisticated monitoring tools than those found in the standard consumer package.
Dolce says the company has been talking to enterprise customers over the last 6 months to learn what that would entail and they are planning on releasing an enterprise version, possibly within the next few months.
The consumer strategy centers on app store downloads and provider retail stores using a freemium model with in-app upselling for revenue, whereas the enterprise strategy will focus more on a traditional enterprise sales technique. While he acknowledges and hopes employees who are Lookout consumer users will bring it to the attention of managers, executives and IT, they will focus on using a salesforce to sell directly into the enterprise.
As Hering says, mobile security covers a broad array of areas and they are working with mobile device management vendors to act as partners because they cover different aspects of the phone security.
Armed with $150M in cash, they have a lot of flexibility to expand markets, add customers and bring on additional employees to take their product the next step.