AppOmni Closes $40M Series B As SaaS Security Heats Up

San Francisco-based AppOmni raised a $40 million Series B as more enterprises look at ways to secure the growing amount of SaaS applications being used in their workplaces.

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The new round was led by Scale Venture Partners, with participation from Salesforce Ventures1 and ServiceNow Ventures and existing investors ClearSky, Costanoa Ventures, Inner Loop Capital and Silicon Valley Data Capital. Founded in 2018, the company has raised more than $53 million to date.

AppOmni helps  companies secure the applications their employees use — including the data that flows in and out of the apps. That has become more important as SaaS applications have exploded across the enterprise work landscape, with employees reliant on platforms such as Zoom, Microsoft Teams and Slack.

That rapid adoption of SaaS applications by more and more enterprises convinced AppOmni the time was right to raise money.

“We’re taking this investment to unrestrain our growth,” said co-founder and CEO Brendan O’Connor.

Changing environment

In the past, companies often sought to secure the perimeter and endpoints of their networks, but  now new SaaS security is needed as applications are becoming the new business operating system, said O’Connor.

“Applications do not run on the endpoint, they run on the cloud,” he said.

The need for SaaS security helped lead AppOmni to more than 900 percent growth from 2019 to 2020, said O’Connor.

Ariel Tseitlin, partner at Scale, said his firm did a large research application last year to identify the future of cloud application security, after realizing major SaaS platforms were becoming actual operating systems and needed better security than what was being offered.

“When AppOmni was ready for its Series B, we had no hesitation that it was the right investment for us,” said Tseitlin.

Growing market

Security around SaaS applications has proven popular among investors. Just last week New York-based DoControl raised a $10 million Series A, as it looks to compete in a market that includes AppOmni, Obsidian Security and Altitude Networks.

O’Connor did not name specific competitors, but said his 50-plus-person company competes on some levels with older cloud access security brokers and penetration testing companies.

Regardless of the competition, both O’Connor and Tseitlin said the company has a tremendous opportunity to grow into its own standalone company as SaaS application usage keeps increasing.

“It’s a massive market opportunity,“ Tseitlin said. “Companies on average use over 100 SaaS applications. Defining the standard for what it means for a cloud application to be secure for the long tail of applications out there is an even more massive opportunity that we’re excited for.”

Illustration: Dom Guzman