The business of hacking has dealt a huge blow to our democracy, not to mention a plethora of organizations and individuals, and our collective sense of sanity. One silver lining, however, has been that it has led to the emergence of a number of security startups that are building and deploying a range of tools to try to track and stop the nefarious activity. One of the larger of these, CrowdStrike, today is announcing that it has raised $100 million, and is now valued at $1 billion.
CrowdStrike, based out of Irvine, CA, may not be a household name, but the company has been at the center of some of the biggest and most high-profile hacking investigations of recent times. Specifically, it was the first to publish evidence of the Russian government interfering in the U.S. election by hacking into and subsequently releasing emails for the Democratic National Committee. That report was originally published in December; parts of it have subsequently been revised. In the interim, the company has also remained at the center of wider conversations about alarming developments and trends in this area.
The funding was led by existing investor Accel, with participation from CapitalG (previously called Google Capital, which led its previous $100 million round), and three of its customers: Warburg Pincus, March Capital Partners and Telstra, the Australian carrier. CrowdStrike has now raised $256 million in funding to date.
CrowdStrike says that the funding, and the big boost to its valuation, is due in part to the huge spike it has seen in demand from customers.
“CrowdStrike’s rapid market penetration has been one of the most impressive things we’ve seen,” said Sameer Gandhi, partner at Accel, in a statement. “The investment will enable CrowdStrike to build on the incredible momentum the company has experienced globally and expand its presence in domestic and international markets to meet the demand for its platform and services.”
The company’s flagship product, its Falcon platform, focuses on endpoint protection. It competes against tradition antivirus software to protect systems that have been build using cloud services and other next-generation architectures that traditional antivirus solutions are less well equipped to cover. This includes protection against malware that is powered by machine learning using behavioral blocking; ransomware and zero-day exploits; and signature-less malware.
Other next-generation security firms in the same space include Cylance and Carbon Black, although investors (predictably?) believe CrowdStrike is the stronger of the pack.
Gene Frantz, partner at CapitalG, notes that his firm “evaluated the entire endpoint protection market” before investing “and found CrowdStrike’s approach and technology to be absolutely best-in-class in offering an end-to-end platform, fully powered by the cloud, coupled with security services and threat intelligence for a complete approach to endpoint protection.
Nevertheless, business for these firms has effectively exploded in recent months, with the larger market for endpoint security protection forecast to be worth over $17 billion by 2020 (a figure from 2016 — meaning the recent hacks could have pushed that figure even higher).
Today CrowdStrike does not reveal its revenue figures but says that it has endpoint deployments in 176 countries and processes 40 billion security events each day.
According to CrowdStrike, it has seen 476 percent growth in new endpoint protection platform (EPP) subscriptions, year-over-year; 382 percent growth in endpoint protection platform (EPP) subscriptions for Fortune 500 customers, year-over-year; 400 percent growth in the number of $1 million or greater transactions, year-over-year; 253 percent growth in endpoint protection platform (EPP) sensors deployed, year-over-year.
And as CrowdStrike itself becomes smarter as a result of its own basis in machine learning, this economy of scale in effect makes it more powerful.
The company will be using the funding both to continue investing in its platform but also for business development in new markets, the company said.
“As we continue to drive our revolutionary platform to market, this substantial financial backing will allow us to expand engineering, sales, marketing, and operational resources to maintain our position as the industry leader in endpoint security and grow at an even faster rate,” said George Kurtz, CrowdStrike’s co-founder and chief executive officer, in a statement.