Lacework, which allows companies to build securely in the cloud, has closed a $525 million growth round at a valuation of more than $1 billion.
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The new round for the San Jose, California-based company was led by Sutter Hill Ventures and Altimeter Capital, and included participation from D1 Capital Partners, Coatue, Dragoneer Investment Group, Liberty Global Ventures, Snowflake Ventures and Tiger Global Management.
The company has now raised nearly $600 million since being founded in 2015.
Laceworks plans to use the new proceeds for product development, sales and market and international expansion—especially into Europe, said CEO Dan Hubbard. The company also plans to more than double its 220-person team by the end of the year.
“This is about both doubling down on our go-to market and also investing in and extending our platform,” Hubbard said.
Riding cloud adoption
While 2020 was a challenging year for many businesses, Lacework realized 300 percent revenue growth as many companies accelerated their evolution to cloud environments and needed to secure workloads in cloud environments.
“We really timed the market really well,” Hubbard said.
Lacework’s solution helps secure businesses as they build on public clouds like Amazon Web Services, Microsoft Azure and Google Cloud Platform or hybrid/private clouds. It also provides security for containers and Kubernetes. The platform helps with configuration and compliance, as well as securing infrastructure as code and workloads in environments like Kubernetes.
Competition has dwindled through dealmaking in the space in the last few years, Hubbard said. Palo Alto Networks has bought four companies in the space, which has helped form its cloud security offering Prisma Cloud, he said. Another competitor, Dome9, was bought by Check Point Software Technologies in 2018 for about $175 million.
Despite competition from the likes of Palo Alto Networks, Hubbard said he sees the market for a stand-alone company to emerge.
“We believe as a company that this problem we solve is not just a feature of another large company,” he said.
Lacework has a direct relationship with the company that pulled off the largest software IPO ever last year: Snowflake. Both companies were incubated by Sutter Hill, and Lacework actually was built on top of Snowflake’s platform.
Snowflake is now an investor through its venture arm and Lacework could one day eye an exit similar to that of the data-warehousing giant.
“Someone will build a large stand-alone, public company in this space,” Hubbard said.
Illustration: Li-Anne Dias.
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