Duo Security, the two-factor authentication startup backed by Benchmark and Google Ventures, wants to do more to help protect companies from hackers trying to gain access to their networks. With that goal in mind, it’s launching a new product to secure their networks and announcing $30 million in new funding led by Redpoint Ventures.
For the last several years, Duo has been focused mostly on bringing easy-to-use and -implement two-factor authentication to enterprise applications. As more enterprises move their data to the cloud and more employees access company documents and systems via mobile devices, Duo’s security offerings were meant to mitigate the risks involved with this new era of computing.
By leveraging push notifications and other technologies, the company has made sign-ins more secure — and easier to implement — for thousands of enterprise customers, including Facebook, Etsy, Box, Yelp, and Threadless. But Duo saw that there was more it could do, that there was a bigger opportunity to protect clients from data breaches from hackers.
To do that, it’s releasing a new product, called Duo Platform, which will enable IT teams to create policies and automate enforcement of their networks while also tracking the security profiles of devices trying to access their systems.
The biggest threats to enterprise networks are no longer frontal attacks from hackers trying to gain access to their systems. Today, nearly all data breaches are the result of stolen credentials or compromised devices entering a connecting to a network. Furthermore, attackers frequently lie dormant within compromised systems until long after most security systems stop paying attention.
Duo’s new Platform product takes advantage of its prior learnings and extends them deeper into customer networks. It enables IT administrators to create more granular rules around who can access its applications and under what conditions. It provides real-time insights into devices trying to connect to their applications and can block data breaches as they’re happening by detecting access-related security threats.
According to co-founder Jon Oberheide, Duo Platform takes into account a number of factors while actively trying to prevent data breaches. Those include ensuring that a device is healthy, determining whether it is encrypted and if its operating system is up to date, if it’s coming from a location that’s expected or normal, which browser it’s using and which plugins are enabled in that browser, etc.
By tracking all of these data points, Duo Platform can determine what good and bad access looks like, and block devices accordingly. It can also generate reports on access and authentication, giving administrators better tools for keeping track of the devices and users accessing their networks and applications.
Duo Platform follows the same sort of revenue model of its other tools, charging enterprises $6 per user, per month for access to the product. That’s double the $3 per user, per month that they currently pay for access to its enterprise edition. But it should provide a lot more protection than its pure two-factor authentication product.
With the release of the new product, Duo Security sees itself as going after a huge new market opportunity. After all, two-factor authentications is about a $2.5 billion market segment today. But enterprises spend a total of $67 billion on overall security annually.
The opportunity could be even bigger than that, as Duo makes security more affordable and thus find more customers. As Oberheide notes, there’s currently a “security poverty line” that keeps some mid-market companies from being protected as well as larger enterprise peers.
“There’s so many security products where you have to hire a staff to manage them… and organizations of that size can’t afford to protect themselves,” Oberheide said. The hope is that by pricing its product within reach of most businesses, Duo Security can grow the overall security pie by enabling more companies to use its tools.
And that’s part of the reason for the most recent funding. With the newest financing, Duo had raised about $48 million in total, which includes money investors that include Benchmark, Google Ventures, True Ventures, Radar Partners, and Resonant Venture Partners.