With messaging apps and Stories, Facebook’s emphasis on mobile features also highlights some of the company’s greatest vulnerabilities as it looks ahead.
The social network where one-third of humanity checks in at least once a month is also a marketplace, a satellite developer, and a maker of VR headsets.
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 asked not to be named. (You might consider that candidates might include some of the big security vendors in the market, as well as the big cloud services providers.) This Series E brings the total raised by vArmour to $127 million.
When asked, Eades said 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.
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 growing 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 amid the rising threat of cybercrime. “We believe that hybrid cloud security is a market valued somewhere between $6 billion and $8 billion at the moment,” said Eades. Cybercrime has been estimated by McAfee to cost businesses $600 billion annually worldwide. Accenture is even more bullish on the impact; it puts the impact on companies at $5.2 trillion over the next five years.
The challenge for many organizations is that they store 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, that lack of cohesion also opens the 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 hasn’t developed a security service per se, but it is among the companies — Cisco and others are also competing with it — that are providing a platform to help manage security policies across these disparate locations. That could either mean working on knitting together different security services as delivered in distinct clouds, or taking a single security service and making sure it works the same policies across disparate locations, or a combination of both of those.
In other words, vArmour takes something that is somewhat messy — disparate security policies covering disparate containers and apps — and helps to hand 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 one big change for his company in the last couple of years has been that, as cloud services have grown in popularity, vArmour has been putting in place a self-service version of the main product, the vArmour Application Controller, to better target smaller organizations. It’s also been leaning heavily on channel partners (Telstra, which led its previous 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 and has “way more than 100 customers,” ranging from hospitals and churches through to “8-10 of the largest service providers and over 25 financial institutions.”
At this rate, he said the plan will be to take the company public in the next couple of years.
Amazon’s formidable presence in the world of retail stems partly from the fact that it’s just not a commerce giant, it’s also a tech company — building solutions and platforms in-house that make its processes, from figuring out what to sell, to how much to have on hand and how best to distribute it, more efficient and smarter than those of its competition. Now, one of the startups that is building retail technology to help those that are not Amazon compete better with it, has raised a significant round of funding to meet that challenge.
Relex — a company out of Finland that focuses on retail planning solutions by helping both brick-and-mortar as well as e-commerce companies make better forecasts of how products will sell using AI and machine learning, and in turn giving those retailers guidance on how and what should be stocked for purchasing — is today announcing that it has raised $200 million from TCV. The VC giant — which has backed iconic companies like Facebook, Airbnb, Netflix, Spotify and Splunk — last week announced a new $3 billion fund, and this is the first investment out of it that is being made public.
Relex is not disclosing its valuation, but from what I understand it’s a minority stake, which would put it at between $400 million and $500 million. The company has been around for a few years but has largely been very capital-efficient, raising only between $20 million and $30 million before this from Summit Partners, with much of that sum still in the bank.
That lack of song and dance around VC funding also helped keep the company relatively under the radar, even while it has quietly grown to work with customers like supermarkets Albertsons in the U.S., Morrisons in the U.K. and a host of others. Business today is mostly in North America and Europe, with the U.S. growing the fastest, CEO Mikko Kärkkäinen — who co-founded the company with Johanna Småros and Michael Falck — said in an interview.
While the company has already been growing at a steady clip — Kärkkäinen said sales have been expanding by 50 percent each year for a while now — the plan now will be to accelerate that.
Relex competes with management systems from SAP, JDA and Oracle, but Kärkkäinen said that these are largely “legacy” solutions, in that they do not take advantage of advances in areas like machine learning and cloud computing — both of which form the core of what Relex uses — to crunch more data more intelligently.
“Most retailers are not tech companies, and Relex is a clear leader among a lot of legacy players,” said TCV general partner John Doran, who led the deal.
Significantly, that’s an approach that the elephant in the room pioneered and has used to great effect, becoming one of the biggest companies in the world.
“Amazon has driven quite a lot of change in the industry,” Kärkkäinen said (he’s very typically Finnish and understated). “But we like to see ourselves as an antidote to Amazon.”
Brick-and-mortar stores are an obvious target for a company like Relex, given that shelf space and real estate are costs that these kinds of retailers have to grapple with more than online sellers. But in fact Kärkkäinen said that e-commerce companies (given that’s also where Amazon primarily operates too) have been an equal target and customer base. “For these, we might be the only solution they have purchased that has not been developed in-house.”
The funding will be used in two ways. First, to give the company’s sales a boost, especially in the U.S., where business is growing the fastest at the moment. And second, to develop more services on its current platform.
For example, the focus up to now has been on-demand forecasting, Kärkkäinen said, and how that effects prices and supply, but it would like to expand its coverage also to labor optimisation alongside that; in other words, how best to staff a business according to forecasts and demands.
Of course, while Amazon is the big competition for all retailers, they potentially also exist as a partner. The company regularly productizes its own in-house services, and it will be interesting to see how and if that translates to Amazon emerging as a competitor to Relex down the line.