HyTrust raises $36M and acquires DataGravity

Word spread late last week that data visibility and security startup DataGravity had been acquired. At the time, though, it was unclear by whom. Now we know. It was HyTrust, a company that specializes in securing workloads that run in private and public clouds. The details of the deal were not disclosed, but over the course of its startup life, DataGravity had raised $92 million from the likes of Accel Partners, Andreessen Horowitz, CRV and General Catalyst.

HyTrust made the acquisition announcement in parallel with its latest funding announcements. The company today said that it has raised a $36 million Series E round led by Advance Venture Partners, with participation from its existing venture capital and strategic investors. These include Sway Ventures, Epic Ventures, Vanedge Capital, Trident Capital, Cisco, Fortinet, Intel and VMware.

Today’s investment brings the total investment into the Mountain View-based company to $95.5 million, excluding two debt financing rounds in 2015 and 2016 that totaled another $13 million.

While HyTrust has been around since 2007, there can be little doubt that interest in its services is probably growing rapidly right now as companies try to shield themselves from what looks like an ever-increasing security risk. “HyTrust is very well positioned to capitalize on a tremendous growth opportunity in the cloud security space,” said David ibnAle, a founding partner of AVP. “The need for security, automated compliance and policy enforcement for cloud infrastructure and data is critical in almost every industry, and HyTrust is front and center in this field.”

The company plans to use the new funding to expand its sales and marketing teams and fund new product development.

As for the acquisition, HyTrust says that it will use DataGravity’s technology to expand its data security solutions and to “further automate and enhance security policy enforcement for workload data.” DataGravity provides its users with tools to secure their data and, for example, help them adhere to local data privacy laws and recover after being hit with ransomware.

Given HyTrust’s focus on workloads and DataGravity’s focus on data, the two products should turn out to be pretty complementary. “The acquisition will accelerate the expansion of HyTrust’s platform capabilities and capitalize on the high-growth cloud security market,” writes Eric Chiu, HyTrust’s co-founder and president, in today’s announcement. “DataGravity’s data discovery and classification capabilities support HyTrust’s mission to deliver a security policy framework that provides customers with full visibility, insight and enforcement of policy across workloads. We couldn’t be more excited.”

A HyTrust spokesperson tells me that the company will continue to sell a re-branded version of DataGravity’s software and that it will continue to support DataGravity’s software customers that sign a new support contract with HyTrust.