Venture

Boston’s August Includes Its Biggest Cybersecurity Round Yet (And Chickpeas)

About seven-and-a-half years ago, Cybereason, a security startup that wants to defend against cyberattacks and threats, was born in Tel Aviv, Israel. Then, searching for better access to customers and investors, the company eyed a move to the United States.

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Cybereason considered the normal hubs: New York, San Francisco, and Washington D.C. But ultimately, as co-founder Yonatan Striem-Amit detailed to Crunchbase News, the startup chose Boston as its new hub.

I wondered what makes a company like Cybereason choose Boston. After all, wasn’t there that whole Cambridge saga?1

“Looking at the talent, market, access to other companies and customers, makes Boston the best choice possible,” to relocate a company, Streim-Amit told me via in a phone interview.

As for that initial hope that a move across the world would lead to better access to investors? It worked. To date, the now Boston-based company has raised over $388.6 million in venture capital.

In fact, this past month, Cybereason raised a $200 million Series E led by SoftBank Group and its affiliates, the largest round for the company in its history, and the largest cybersecurity round landed in Greater Boston of all time, according to the company and Crunchbase data.

Plus, Cybereason’s round made up about 40 percent of venture capital dollars raised by Greater Boston companies2 in August ($487 million). More on the other 60 percent later, but first, this record-breaking round inspired me to dive a bit deeper into what cybersecurity looks like in Boston for this month’s column on the Greater Boston startup scene.

A Recap On Cybereason

SoftBank, which is known for its rapid bets into other companies in the form of large (and often nine-figure) venture capital checks, led Cybereason’s big round.

“Luckily for us, we found a great investor and a great partner in SoftBank, who have the same desire to build something very substantial [and[ not just go for quick returns,” he said. As we discussed in a separate post, the new Series E will be used to further fuel the cybersecurity company’s international presence.

Below is a chart of Cybereason’s total funding over time.

The company mentioned how cybersecurity, in general, has grown tremendously in Massachusetts. Think Akamai Technologies, or Rapid7. Or Raytheon. Or RSA Security.

Traditional cybersecurity companies fit “innovation within the boundaries” of separating good actors from bad actors, he said. But the next generation has realized that “hackers are more sophisticated.” This new wave has created an inflection point in the focuses that cybersecurity companies have.

Check out our previous Boston columns

“You have to have a much higher sophistication and look at the activity and determine by behavior and not just by what something looks like,” he said. Older companies, he feels, tackle problems after they come up. As we’ll unpack below, Cybereason isn’t the only new company looking to anticipate and predict hacks before they even happen.

Beyond Just One

BitSight, another cybersecurity company, in Greater Boston, has raised $151 million in known venture capital funding to date, according to its Crunchbase profile.

Jake Olcott, a VP at the security ratings firm, said BitSight has a ton of friendships within the cybersecurity space. The company is jumping in with other Boston-based companies working on application security, endpoint protection, and vulnerability scanning for partnerships, marketing insight, and smart hires.

From the exit angle, Boston cybersecurity also felt some momentum in August. Palo Alto-based VMware acquired Waltham-based Carbon Black, a security company, for $2.1 billion this past month. Carbon Black works on endpoint security, and went public last year. So while it’s beyond our private company niche, this deal is notable and tells us that Palo Alto has eyes on Boston’s security scene.

But Boston’s startup activity this month went far beyond the cybersecurity sector, so let’s wrap up with a quick roundup.

Chickpeas And Notaries

Going back to August totals, 14 startups across Greater Boston raised $487 million in venture capital funding, up almost three times the dollar amount from last month. I looked deeper to see why the uptick occurred.

First up, food. Motif FoodWorks, which we’ve written about before, added $27.5 million in additional funding to its Series A round. The company now has $117.5 million in known venture funding for its fermentation technology that develops proteins and nutrients for plant-based foods. Also in the food category, Boston-based Biena Snacks raised a $8 million Series B to give all of us crunchy, tasty chickpeas on the go.

Beyond fermentation and chickpeas, startups looking to help renovate old processes also found venture interest in August. Notarize raised $37 million in an extension of its Series B. The company launched a competitor to DocuSign in early June as it works to help its users verify legal documents online.

Ending With An Eavesdrop

Finally, I chatted with Ori Solomon this morning, a Boston-based VC and startup attorney from Morrison Foerster. He mentioned that in terms of small talk on the streets, Silicon Valley and Boston are an inverse of each other.

In San Francisco, a casual stroll can allow you to eavesdrop on tech folks talking about Facebook, Google, Salesforce, or Workday, he said. In Boston, you’re more likely to overhear conversations on something biotech related. And if not that, life sciences.

To me that says that we all need to do a better job of reading into zones outside of our everyday. Boston is no exception. Next month, I want to unpack university and VC startup collaborations rising just in time for back to school. Email or tweet me your tips.

Illustration: Li-Anne Dias


  1. A joke, a joke.

  2. This includes Boston and Cambridge.

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