Venture

Orca Security Closes Killer Series B Funding

Los Angeles-based cloud security provider Orca Security landed a $55 million Series B less than seven months after closing its Series A.

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The new round was led by ICONIQ Capital with participation from previous investors GGV Capital, YL Ventures and Silicon Valley CISO Investments. Founded in 2019, the company now has raised a total of approximately $82 million.

As cloud usage has grown this year, so has Orca’s market, said co-founder and CEO Avi Shua.

“COVID certainly increased demand,” he said. “Most companies were moving to the cloud, but COVID accelerated it.”

Guarding the cloud

Orca’s cloud-native solution can be used on major public clouds such as AWS, Microsoft Azure and Google Cloud Platform, and reads a company’s cloud configuration—detecting malware, misconfigurations and other vulnerabilities.

“We look at how all these companies are moving to the cloud, but most of the tools these companies use are not for the cloud,” said Oren Yunger, vice president at GGV Capital and co-founder of SVCI. “Figuring out how to build tools in an environment that is fundamentally different is interesting to us.”

Adrian Ludwig, CISO at Atlassian and a member of SVCI, said Orca’s cloud-native approach of looking from inside an organization to find vulnerabilities is unique.

“Nearly all early security was built from the outside looking in,” he said. “Orca goes inside and looks at the bowels of an organization.”

The company did not reveal a valuation from its Series B, but Shua said it “grew dramatically from its $20.5 million Series A.” Sales are 10 times what they were when Orca raised its Series A, he added.

Orca plans on using the new money to increase sales and marketing. The 70-employee company only had two salespeople a few months ago and there was a waitlist in August for customers to talk to the company, Shua said.

The company sells into many verticals, but has the best traction in industries focused on security such as financial services and fintech, he said. While Orca sees the majority of its business coming from North America, it is in the process of opening offices in Australia, Europe and Japan, Shua added.

Consolidation and big competitors

Cloud security and compliance has seen some consolidation through recent years and includes some of the largest cybersecurity vendors.

Palo Alto Networks bought RedLock for $173 million in 2018 and followed that with acquiring Twistlock for $410 million and PureSec for an undisclosed amount last year. The cyber giant used the trio to create its cloud security offering Prisma Cloud. Then in April, Rapid7 bought cloud security posture management company DivvyCloud for approximately $145 million.

“We think Orca is different” from those acquired, Yunger said. “What they have developed is an actual platform.”

Shua said he is building Orca to be its own self-sustaining company and the market is there to do so.

“If I wanted to sell I wouldn’t have raised a Series B,” Shua said.

Illustration: Li-Anne Dias.

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