While the Dow closed down 482.57 points on Tuesday because of tensions in Europe, the security industry plowed ahead today as Beyond Identity and eSentire announced major funding rounds that put their valuations over $1 billion.
Cloud-based Beyond Identity raised $100 million in Series C funding which ups the company’s total funding to $205 million for a valuation of $1.1 billion. The company’s passwordless authentication technology aims to tackle one of the security industry’s thorniest challenges: too many passwords.
“As an industry, we are coming dangerously close to being complicit in cybercrime,” said TJ Jermoluk, co-founder and CEO of Beyond Identity. “Password managers, phishable MFA, and outdated VPN technologies are not the answer and will not close the wide-open door that criminals waltz through every day. Today’s announcement sends a loud message that failure is no longer an option.”
For its part, managed detection and response company eSentire raised $325 million, also bringing its valuation to greater than $1 billion. The company plans to invest in research and development and will hire more than 400 employees globally in all facets of the business, bringing its employee count to over 1,000.
The news today was a sign that investors continue to have a keen interest in security companies. Earlier this month, Salt Security landed $140 million in Series D funding to raise its valuation to $1.4 billion. And last week, Securonix announced a $1 billion-plus growth investment. Even more interesting, also in February, ThriveDXUSA said that it now had some $205 million to invest in cybersecurity training and education, funding it received from NightDragon and Prytek.
With the recent funding of Beyond Identity and eSentire, there are now 27 (or more) cybersecurity unicorns, said Jack Poller, a senior analyst at the Enterprise Strategy Group.
Some investors, including Night Dragon founder Dave Dewalt, warn of a downturn in 2022 in venture, due to saturation and market right sizing. but even he noted that the most bleeding edge of technologies will still draw dollars. indeed, Poller said regardless of daily market fluctuations, the need for strong cybersecurity that addresses today’s threat landscape by closing neglected security gaps will only increase.
“The Russia/Ukraine conflict will lead to additional threats and attacks – both from nation-state actors and from others taking advantage of the turmoil,” Poller said. “And thus, the need for stronger authentication. And that’s where Beyond Identity has a strong play with their passwordless authentication technology, which simultaneously increases security and removes friction from the login process. Large investments in passwordless and other cybersecurity technologies can only mean good things for users and enterprises alike.”
Jay Bretzmann, program director for cybersecurity products at IDC, said Beyond Identity offers a simple and elegant solution for identity management security by leveraging TLS connections all the way to the endpoint. Bretzmann said it’s something that should’ve done years ago, but required more endpoint processing capabilities and a PKI certificate manager.
“Not a surprise, the guys who invented SSL for secure internet transactions would come back to solve yet another security challenge,” Bretzmann said.
Allie Mellen, a Forrester analyst, added that the rapid rise of high-profile attacks on critical infrastructure in the past year has expedited adoption of security technologies. Mellen also pointed out that the federal government – specifically CISA – has issued guidance to help organizations start their journey to zero-trust.
“These factors have brought cybersecurity to the public interest more than ever – including to the interest of investors,” Mellen said. “The investments highlight these factors and also some of the top priorities of security teams today – moving towards zero trust and detecting and stopping attacks.”