Venture Capital: Another Big Ticket Deal in CyberSecurity – Menlo Raises $100M
The Series E round valued Menlo Securities at $800 million.
Menlo Security, which is based in Mountain View, California, announced its fundraising of $ 100 million led by Vista Equity Partners. Neuberger Berman, General Catalyst, JP Morgan, and other existing investors also participated in the Series E round. (CRN)
Covid-19 an accelerant
“Whether the business world was ready for it or not, COVID-19 provided the accelerant for organizations of all shapes and sizes to embrace the era of remote work,” Menlo said in a blog. “Almost overnight, the pandemic also forced these organizations to pivot their users and applications to the cloud in order to continue seamless business operations.”
“Securing this new work environment quickly became an essential mandate to ensure a truly safe online experience and keep the business moving forward.”
Menlo also said that the vast new numbers of remote users had overwhelmed legacy VPN infrastructure.
On its part, Menlo said it isolates threats completely so that users can keep business operations running smoothly. Secondly, by enabling fast and direct Internet connectivity, its customers enjoyed a superior user experience. This came at a lower VPN consumption and cost.
Menlo said in a press release that it doubled its average deal size in 2020. Further, it achieved annual recurring revenue growth of 155% compared to the same period last year.
“Despite the challenges of COVID, we’re having a great year,” Menlo Security CEO Amir Ben-Efraim told CRN. “We have a solution that’s of high relevance in the COVID era.”
“Menlo Security has taken a unique approach with Isolation technology at its core that is able to completely neutralize all critical attack vectors of Web and email,” said Ryan Atlas, Managing Director, Vista Equity Partners.
Use of funds
Menlo Security intends to use the money from the Series E round to scale up its product offerings. It will also accelerate delivery, and fuel market expansion.
“This new round of financing and partnership with the Vista team provides us with the means to accelerate our execution capabilities across all dimensions of the business and meet the needs of our global customers as they transition to Zero trust and SASE based deployment models,” said Amir Ben-Efraim.
The startup is hoping that its landmark five-year, $198.9 million channel-led contract with the Defense Information Systems Agency (DISA) will enable it to double, even triple, the size of its US federal team between 2020 and 2021, according to CRN.
An IPO in a couple of years?
With increased revenues, Menlo also intends to beef up its legal and finance departments. This is in preparation for a public listing in a couple of years.
This week has been a busy one for venture financing and M&A deal-making in the cybersecurity sector.
SentinelOne announced Wednesday its Series F raise of $267 million in a round led by Tiger Global Management, with participation from Sequoia Capital Global Equities and existing investors including Insight Partners and Third Point Ventures.
Also on Wednesday, global cybersecurity leader Palo Alto Networks (NYSE: PANW) announced its agreement to acquire Expanse Inc for approximately $ 800 million.
Expanse is a leader in attack surface management.
Related Story: A Big Fundraise, And An Acquisition, In Cybersecurity
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