ForeScout, a security company that helps firms detect devices on their networks they might not know about, announced a $76 million investment round today on a billion dollar valuation, making it a member of the vaunted unicorn club.
The company has come a long way in a short time to attain that unicorn status, reporting it has tripled its value in just 18 months.
What’s particularly interesting about this announcement is that Wellington Management, a public-market investment company led the round instead of a traditional venture capitalist. That usually signals that an IPO could be close. In fact, ForeScout CEO Michael DeCesare told me (without even being asked) that the company is thinking about an IPO, and that he will be ready when the time comes.
He certainly has room to maneuver for some time with the money from this round, but clearly the goal is to become a public company and an investment from Wellington should help pave the way for that.
Today’s investment brings the total across all rounds to over $121 million.
DeCesare, who was once president at McAfee says times have changed and security companies have to change with them. One of the things that attracted him to ForeScout was that it takes a different angle in security, finding unknown devices attached to a company network, something he sees as increasingly important in the years ahead as we have more Internet of Things devices connecting to networks inside enterprise organizations.
You may think that network administrators know exactly what’s on their network, but if you believe ForeScout’s own research, there is a disconnect between how many devices admins think are attached to the network and how many actually are. In fact, DeCesare claims that when they run their software, they find 20-30 percent more devices than IT believed they had.
What ForeScout does is make those devices visible and lets administrators see what they’re doing and decide what belongs on the network and what doesn’t. In a time where breaches have become commonplace, enterprise customers are looking for better ways to understand what’s connecting to the network.
That could be a guest plugging in their laptop on an active wired wall port in a conference room, a malicious user unplugging a printer from the port and connecting their laptop for reconnaissance or an engineering group spawning a bunch of virtual machines for testing purposes that do not adhere to security standards, DeCesare gave by way of example.
The message appears to be resonating with customers. ForeScout reported $125 million in fiscal 2015 revenue. As the company grows, DeCesare wants to make sure he has the firepower to keep up and to that end he outlined some very specific targets for the funding bestowed upon his company today.
First all he plans to double the research and development team, growing from 100-200 employees this year. Next, he wants to enhance his tech support team adding 100 people to that group. Finally, he wants to increase sales capacity.
In all the company plans to add around 300 employees this year with an eye toward 900 by the end of the year, but he says he will dial that back if the numbers don’t warrant adding them. Conversely if growth is better than anticipated that number may go up. Hiring will be driven by growth rather than any arbitrary target, he said.