Vectra turns unicorn as Blackstone backs AI security firm
Is the crowded cybersecurity marketplace ready to accommodate another well-capitalised, AI-powered unicorn doing threat detection and response? Hell yes, say Vectra’s investors — pumping $130 million into the US-based company, which announced the funding today (April 29), taking it to a post-money $1.2 billion valuation.
Patent-rich Vectra, based out of San Francisco, specialises in cloud and network detection and response. It has IP that includes techniques for tracking insider threat without the need for intrusive software on a given endpoint, as well as machine learning techniques that allow its software to pick up malware “phoning home” to C2 servers even if it is using legitimate software packages to achieve this.
Both Vectra CEO Hitesh Sheth and CTO Oliver Tavakoli are veterans of network security multinational Juniper Networks. (Sheth was EVP/GM for its switching business and before that, SVP for the Service Layer Technologies group, which included security; Tavakoli was CTO for its security business from ’05-’13, before joining the startup.)
See also: 6 FREE cybersecurity tools CISOs and their teams should know about.
The Series F round was led by funds managed by Blackstone Growth (BXG), the inaugural growth equity fund of $649 billion private equity firm Blackstone — which raised $4.5 billion in March for BXG to make it the largest first-time growth equity private fund raised in history. (Other BXG investments include Bumble and Oatly.)
Viral Patel, a senior MD at Blackstone, said: “Vectra has a proven ability to stop in-progress attacks in the cloud, on corporate networks, and in private data centers for some of the top organizations in the world. The company has experienced extraordinary success through its commitment to combining innovative AI technology, first-class customer service, and top talent, and Blackstone is excited to become part of the Vectra team.”
(Vectra provides a platform dubbed “Cognito” that analyses network metadata and sits four applications on top of that, including Cognito Stream, which sends “security-enriched” metadata to data lakes and SIEMs; Cognito Recall, a cloud-based application to store and investigate threats in enriched metadata,;and Cognito Detect for Office365 and Azure AD which “finds and stops attacks in enterprise SaaS applications.”)
There have already been more $100 million+ funding rounds for security firms in 2021 than there were in 2020 — itself a record year for cybersecurity investments with over $7.8 billion invested in the industry globally, according to Crunchbase. Some 1,500+ cybersecurity companies globally have received venture funding since 2017 and have not yet exited. About 58% are seed-stage, 32% early stage, and 10% late stage.