When we last checked in with Cequence Security in February 2019, the company had just closed a $17 million Series B and was concentrating on security to protect business logic. While it still does that, it has shifted focus to API security, and today it announced a $60 million Series C.
Menlo Ventures led the latest round with participation from new investors Icon Ventures, Telstra Ventures and HarbourVest Partners along with existing investors Shasta Ventures, Dell Technologies Capital and T-Mobile Ventures. The company said it has now raised $100 million.
CEO Larry Link said that the startup was seeing more vulnerabilities through APIs with customers, and they began to shift the focus of the Cequence analytics engine to find those kinds of vulnerabilities.
“We now will discover what your API footprint looks like. [Without having] to instrument it, we’re finding things, and then we detect [any] abuse that’s going on on those API endpoints, and then we can mitigate that. So that’s how the product has evolved,” Link told me.
He said that Cequence looks at approximately 150 data points to determine if the activity is something to worry about.
“So we look at individual requests first, and then we look at clustering of requests second, and then we look at the intent of those requests third, and that’s where we tease things out like, ‘Hey, this is an account takeover attack, or this is a credential stuffing attack, or this is an inventory manipulation attack,'” he said.
Link said the company grew 2.5x over the last year and that there is a lot of room for growth. “We’re not releasing our revenue numbers, but it’s a very healthy growth rate and pretty high ARR for this kind of the business, and that’s why we wanted to raise this Series C, because we have a lot of opportunity. We need to fuel that,” he said.
The startup has just over 100 employees today and could reach as high as 250 by the end of 2022, depending on how the business goes. Link said that as the company expanded over the last year and moved at least partly remote, the workforce has grown more diverse.
“We’re big believers in the value of a diverse workforce. We think it gives us better insight and is a better platform to grow and expand the company. So the recent change in the last year and a half where some jobs need to be HQ-based, but most of our jobs can be working from anywhere. And this is kind of a new transition that we’ve seen, and it’s enabling us to get, I think, a better quality workforce and also a more diverse workforce,” he said.
This is Link’s fifth startup. His previous job before joining Cequence was VP of Sales at Palo Alto Networks. The founders hired him after starting the company to add an experienced industry veteran to run the show.