Maryland-based cybersecurity company Huntress raised a $40 million Series B, just 15 months after raising its Series A.
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The new round was led by JMI Equity, with ForgePoint Capital and Gula Tech Adventures also increasing their existing investments in the company. Founded in 2015, the company has raised a total of $60 million in funding.
Huntress competes in the crowded managed detection and response (MDR) area of cybersecurity — which helps with detection of malware and other malicious activity in a network and helps eliminate those threats. However, unlike many of its competitors, Huntress is focused on the small and medium-sized business segment of the market; companies with fewer than 1,000 employees and small to no security teams.
“Our thinking was: How do you take these companies that don’t have IT or security teams and give them this security?” said founder and CEO Kyle Hanslovan.
Finding a place in the market
That thought helped set the company apart in an MDR market littered with large companies such as CrowdStrike, Mountain View, California-based SentinelOne and Boston-based Cybereason. Huntress started selling in 2017 and now has 30,000 customers — mainly through resellers such as managed security service providers.
“They are providing security for the other 99 percent,” said Suken Vakil, general partner at JMI.
Along with its growing customer base, the nearly 100-person company has hit $10 million in annual recurring revenue. That growth led it to seek out a Series B despite having half of its $18 million Series A from February 2020 still in the bank, Hanslovan said.
The company had a lot of “optionality” during its raise, with strategics — such as telecommunication companies — private equity and even SPAC sponsors looking to acquire the company or participate in the round, he added, saying that in general, the company receives an offer to be acquired once a quarter.
However, Hanslovan said the company is focused on investing in sales and marketing and its partner ecosystem while growing as the dominant MDR provider to the SMB market.
“We just don’t see a scenario where we won’t grow to a $100 million in annual revenue company,” he said.
Illustration: Dom Guzman
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