The new $53.5 million round doubles SafeBreach’s total funding, and will be using primarily to strengthen its sales efforts, including its growing channel business, in what they see as a rapidly expanding market.
Ken Smith, SafeBreach’s CRO
Today, Sunnyvale, CA-based SafeBreach, one of the major players in the breach and attack simulation [BAS] space, has announced its raising of $53.5 million in their Series D funding round. The round was led by Sonae IM and Israel Growth Partners, with additional participation from Sands Capital and Bank Leumi. The D round also includes a strategic investment from digital workflow powerhouse ServiceNow, as well as participation from existing investors. This capital infusion basically doubles the investment in SafeBreach, bringing the company’s total funding to over $106 million. This also represents the largest investment to date in a breach and attack simulation vendor.
The new investment takes place at a time when the BAS market is experiencing strong momentum, fueled by much greater customer awareness.
“Before this, I was five-plus years at FireEye, and was there when we bought Verodin, so have been very familiar with the space, said Ken Smith, SafeBreach’s CRO, who has been running all sales, and business development at the company for the last 18 months. “The market has evolved tremendously – largely thanks to Verodin. FireEye buying them stimulated awareness around breach and attack simulation. It was a niche tool before, and awareness of BAS wasn’t well known at the C levels. Now, at the last Black Hat in Vegas, I had multiple conversations with C levels, and I didn’t have to explain what BAS was. That’s a good thing.”
The BAS market is somewhat unusual for IT in that it is highly oligopolistic.
“There are four companies that make up 95% of the market – us, Verodin, which is now Mandiant, AttackIQ and Cymulate,” Smith said. “It’s far from saturated. Gartner and Forrester are now putting more emphasis on the area, but I think that the true enterprise market is penetrated less than 5%. Companies are looking to justify what they have done, to mitigate risk posture, and show ROI on tools they have bought over the years.”
SafeBreach still has just one product – its core platform – but continues to build out the platform’s capabilities.
“The big difference is that we added cloud to our content library, and we are now the only one who offers it, so you can test infrastructure around AWS and Azure, and eventually GCP,” Smith indicated. “We added vulnerability management, and just launched our Web Application Firewall. We are also adding to our content library, and now have over 22,000 plays in the playbook. We are launching SafeBreach as-a-Service as well.”
While SafeBreach started out selling direct, they have beefed up their channel presence considerably since Smith joined the company.
“In 2020, I hired a VP of Global Channel from Proofpoint [Jim Sullivan], and he has done an amazing job at building out the channel,” he said. “We went from having many partners signed up to a focused effort with fewer partners. In the US, we decided on enabling 2-3 national focused partners and the same number in each region in the US, 2-3 regional partners
“Our channel contribution was sub-5% a year and a half ago,” Smith continued. “It is now up to 24%, and this quarter will be over 30%, with 35-40% being our goal. We don’t want channel conflict, and are ultimately working toward a channel model. Our investment and incentives in the channel to enable them is second to none, because to get to the numbers we want, we need 40% of sales to be channel. Jim is hiring four new channel directors, two in the U.S., one in APAC and one in EMEA.” The channel also includes some very large MSSPs.
“Our strategic partnerships are having a tremendous impact, particularly compared with our competitors,” Smith said. “Some very large OEMs chose us to test their feeds over our competitors, and while some of these are new, all of them are now live.”
The channel and strategic partnerships will receive significant monies from the new funding round.
“We will be using some of the round to grow out the marketing team, and invest in R&D, but the majority is focused on driving velocity in our Go-to-Market,” Smith said. “We are investing heavily in regions where we have not had a physical presence, principally EMEA and APAC, even though we have lots of customers there. We just hired our first people there, VPs of EMEA and APAC and two other sellers.
“We are also placing significant emphasis on growing the channel, which will be consistent and global in nature,” Smith indicated. “We are hiring people in all those regions, with four channel hires immediately and likely two more to support – a dedicated SE for the channel team and a new marketing person.”
Additional funding is also going to the alliances team.
“We are doubling the team’s size, and our efforts around alliances to work on the Go-to-Market and how it will give us leverage in the marketplace,” Smith said.
