Six Months After Its Series A, Noname Security Raises $60M As Securing APIs Stays Hot With Investors

Palo Alto, California-based API security provider Noname Security locked up a $60 million Series B, just about six months after closing a $25 million Series A late last year.

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The round was led by Insight Partners, with Next47, ForgePoint and The Syndicate Group (TSG). Founded early last year, the company has now raised $85 million.

Securing APIs — or application programming interfaces — has become somewhat of an obsession for investors in the last two months as money has rolled into the small, but expanding subsector of cybersecurity.

Last month, London-based 42Crunch raised a $17 million Series A, followed by Palo Alto, California-based Salt Security closing a $70 million Series C. Salt has raised a total of $120 million in the last year.

Then earlier this month, Colorado-based ThreatX announced it had closed a $10 million round. Just last week Sunnyvale, California-based Cequence Security announced it received an undisclosed strategic investment earlier this year from T-Mobile Ventures, with existing investors also participating.

“Investors are hearing the same things we hear when we talk to our network of CISOs (chief information security officers) about APIs,” said Thomas Krane, principal at Insight Partners. Krane said Noname’s Series B was competitive among investors.

APIs everywhere

In simple terms, an API is what enables two applications to communicate with each other. When someone uses social media, searches for a flight or buys groceries, the app they are using needs to connect through an API to another application for that transaction to go through.

APIs are also virtual in software development, especially with the advent of “microservices.” Microservices allow developers to add prebuilt — but often necessary — functions to an app, like communication and location services. Without secure APIs to protect the data that flows between applications, bad actors can corrupt the process.

Co-founder and CEO Oz Golan said when he started Noname, every CISO said they saw gaps in their API security that needed to be solved.

“It’s not a question anymore of if you are going to buy an API security tool, but when are you going to buy it? Today? Tomorrow? A year from now?” he said.

Golan acknowledged the popularity the space has seen recently, however he believes Noname provides one of the first cloud-native, comprehensive solutions in the market — offering  discovery, analysis, remediation and testing to the process.

The 70-person company was not actively raising money and anticipated its Series B would be in the first half of next year, but Noname decided the timing was right after seeing its growth in the market and investors reaching out to participate in a new round.

“Even though we raised six months ago, after the traction we saw we decided we wanted to double down and accelerate our growth,” said Golan, adding the company has dozens of customers.

With so much of web and mobile traffic being API-dependent and every company developing software using APIs, Golan sees a limitless market.

“Every organization in the world needs this,” he said. “We have the opportunity to be something huge.”

Illustration: Dom Guzman