Cybercrime is a rising problem — expected to cost organizations between $500 billion and $2 trillion by 2019. Now a startup that has built what it markets as an economical tool to fight cybercrime has raised some money to help it grow.
vArmour — a startup that offers security solutions specifically aimed at enterprises that run services and apps across multiple clouds — has raised $41 million in a Series D round of funding. This is a growth round for vArmour in more ways than one: in addition to getting a healthy cash injection, vArmour is also picking up a key strategic partner that will help it expand its business in a direct way.
Alongside Redline Capital and other strategic investors that are not being named at the moment, Telstra — the large multinational carrier based out of Australia — is leading the investment. It will use the new tie to boost its managed services business, launching a new partnership with vArmour selling data center security services in Asia Pacific.
Tim Eades, vArmour’s CEO, would not disclose the new valuation but said it was “a good upround” from the previous valuation. To date, vArmour has now raised $83 million. You might recall how it entered the market in 2014 with a splash, having raised all of its previous funding while it was still in stealth mode, quietly building its software and picking up security customers along the way.
The upround is in part because vArmour is very much in that category of enterprise startups that is generating revenues from day one. Security startups are not always very forthcoming with their customer lists (for good reason, as you can probably guess), but to give you an idea of how vArmour is growing, the company currently has some 165 customers globally covering 100,000 virtual machines, Eades told me, with categories covered including financial institutions, government agencies, healthcare companies, retailers and and carriers. The target is to grow that to 450 customers this year.
Eades also said that the company was cash-flow positive as of last summer, although it’s now putting all its returns into growth. Its solutions have been described as less expensive than incumbent or rival solutions (it competes, Eades says, against the likes of Fortinet and Palo Alto Networks), although Eades claims that this is about efficiency, not margin slashing.
“What you are finding is that if you are a business with an old fashioned firewall or monitoring tools, the maintenance streams alone on those can fund getting our product,” he said. While it took hours to install vArmour when it first launched (still in stealth) today, he claims that the product can be installed “in 15 minutes, and you can have your data center segmented within an hour.”
vArmour’s solution differs from some other security services in that many of the latter are focused at defending an organization’s IT infrastructure from the perimeter. vArmour, on the other hand, sits inside networks, and when it detects a problem, its software segments it off. Eades says that right now there is a bifurcation in attacks, with the biggest threats not just from nation states, but also organized crime. The latter has given rise to more ransomware attacks, he added. “It is very sophisticated and lasts a long period of time.” So to help build a better historical profile, the company also offers forensics for more advanced threats.