The new Series D round, which consists of $1.3 billion to a company valuated at $8.3 billion, is the largest raised to date in the security space.
Today, San Jose-based Lacework is announcing their Series D funding, which brings in $1.3 billion to the company, which is currently valuated at $8.3 billion. It is the largest-ever funding round in the security industry. This funding round was led by existing investors Sutter Hill Ventures, Altimeter Capital, D1 Capital Partners, and Tiger Global Management. New investors are Franklin Templeton, Counterpoint Global (Morgan Stanley), Durable Capital, General Catalyst, and XN. Coatue, Dragoneer, Liberty Global, and Snowflake Ventures, all existing investors, also participated.
Lacework came out of stealth in 2015 as a pioneer in the data-first security platform space, with the Lacework Cloud Security Platform, that integrated security natively from code to run time, and emphasized the use of automation and machine learning. Today, much of the security industry now worships before that same altar of automation and machine learning. Lacework believes, however, that they still have a significant differentiation in the market.
“Our original differentiation with Polygraph, our data-first patented machine-learning engine, is still a core differentiation for us, even with the industry’s broader use of machine learning,” said Meg Diaz, Laceworks’ VP of Product Marketing. “We are also very differentiated in how we use it. With cloud, new things spin up and down all the time, and our machine learning recognizes the patterns for that. Our machine learning also recognizes the specific patterns of a customer’s unique environment, and we provide meaningful alerts based on those.”
Diaz said that even as the industry moves to reducing endless streams of alerts, Lacework still has a differentiation there as well.
“Most security still focuses on creating rules,” she stated. “Customers see the different between other approaches and what we do. They have a ton of alerts. We provide high-level critical alerts. Others still focus on traditional tools where you write policies, and while they apply machine learning, it is still more supplemental. We take all that data in, create the baseline and look for the deviations.”
The massive new funding round will be used for traditional purposes like expanded R&D and sales and marketing, but there is also a focus here on strategic acquisitions going forward.
“In addition to the acceleration of investment in R&D, last week we announced our first acquisition, of Soluble,” Diaz said. “That is our plan, to pursue additional strategic acquisitions, although there is still a big focus on organic growth. Security compliance, vulnerability management and threat detection are still our core, but we are looking at additional coverage areas. We didn’t have coverage for infrastructure-as-code until we bought Soluble.” This allows Lacework to ‘shift left’ and bring developers more closely into the security process, and thus integrate security practices earlier in the software delivery process.
The Lacework ecosystem includes strategic integrations with Kubernetes, Terraform, and Jira, ISVs alliances with companies like Snowflake, New Relic, AWS, CCP and Azure. They also have channel partnerships with companies including Presidio, EVOTEK, Guidepoint, and Trace3, and in Canada, with Benchmark and GoSecure. More than 60% of Lacework’s new business comes through partners.
“We have programs to expand our partner business and to build out those channel relationships more, and there will be major news on that front,” Diaz said. “These are a mix of CSPs, and traditional partners including MSSPs, and national and regionally specific partners. The plan is to continue to grow and expand that, continuing to expand geographically in EMEA, and ANZ in particular, and among SIs.
“This new funding helps to show that Lacework is the right company with the right technology at the right time,” Diaz concluded. “There’s a lot to show customers how we can meet their needs now and into the future. We have a proven team and a differentiated platform, and excitement continuing to partner with the channel around that.”