As more organizations move to cloud-based IT architectures, a startup that’s helping them secure that data in an efficient way has raised some capital. vArmour, which provides a platform to help manage security policies across disparate public and private cloud environments in one place, is announcing today that it has raised a growth round of $44 million.
The funding is being led by two VCs that specialise in investments into security startups, AllegisCyber and NightDragon.
CEO Tim Eades said that also participating are “two large software companies” as strategic investors that vArmour works with on a regular basis but declined to name them. (You might consider that candidates might include some of the big security vendors in the market, as well as the big cloud services providers, as two possibilities.) This Series E brings the total raised by vArmour to $127 million.
When asked, Eades said that the company would not be disclosing its valuation. That lack of transparency is not uncommon among startups, but perhaps especially should be expected at a business that operated in stealth for the first several years of its life. However, according to PitchBook, vArmour was valued at $420 million when it last raised money, a $41 million round in 2016.
That would put the startup’s valuation at $464 million with this round, if everything is growing at a steady pace, or possibly more if investors are keen to tap into what appears to be a growing need.
That need might be summarised like this: we’re seeing a huge migration of IT to cloud-based services, with public cloud services set to grow 17.3 percent in 2019. A large part of those deployments — for companies typically larger than 1,000 people — are spread across multiple private and public clouds.
This, in turn, has opened a new front in the battle to secure data. “We believe that hybrid cloud security is a market valued somewhere between $6 billion and $8 billion at the moment,” said Eades.
Many organizations are storing information and apps across multiple locations — between seven and eight data centers on average for, say, a typical bank, Eades said — and while that may help them hedge bets, save money and reach some efficiencies, but the lack of cohesion also opens to door to security loopholes.
“Organizations are deploying multiple clouds for business agility and reduced cost, but the rapid adoption is making it a nightmare for security and IT pros to provide consistent security controls across cloud platforms,” said Bob Ackerman, Founder and Managing Director at AllegisCyber, in a statement. “vArmour is already servicing this need with hundreds of customers, and we’re excited to help vArmour grow to the next stage of development.”
vArmour is among the companies — Cisco and others are also competing with it — that are providing a platform to take something that is somewhat messy — disparate security policies covering disparate containers and apps — and handle it in a more cohesive and neat way by providing a single way to manage and provision compliance and policies across all of them. This not only helps to manage the data but potentially can help halt a breach by letting an organization put a stop in place across multiple environments.
“From my experience, this is an important solution for the cloud security space,” said Dave DeWalt, founder of NightDragon, in a statement. “With security teams now having to manage a multitude of cloud estates and inundated with regulatory mandates, they need a simple solution that’s capable of continuous compliance. We haven’t seen anyone else do this as well as vArmour.”
Eades said that the big change in the last couple of years for vArmour is that, as cloud services have grown in popularity, it has been putting in place a self-service version of the main product, which it sells as the vArmour Application Controller, aimed at smaller organizations. It’s also been leaning heavily on channel partners (Telstra, which led its last round, is one strategic of this kind) to help with the heavy lifting of sales.
vArmour isn’t disclosing revenues or how many customers it has at the moment, but Eades said that it’s been growing at 100 percent each year for the last two. At this rate, he says that plan will be to take the company public in the next couple of years.
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