Venture

SentinelOne Nabs $267M, Reaches $3B-plus Valuation

Mountain View, California-based SentinelOne plans to pursue acquisitions after securing a $267 million Series F that tripled the company’s valuation from just nine months ago.

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The round, which values the company at more than $3 billion, was led by Tiger Global Management, and included participation from Sequoia Capital Global Equities and existing investors including Insight Partners and Third Point Ventures.

In February, the company announced a $200 million raise at a valuation of $1.1 billion.

Despite still having that previous money in the bank, the company decided the timing was right to add to its balance sheet after seeing tremendous growth in the last seven months and expanding its offerings, said co-founder and CEO Tomer Weingarten.

“We knew we could probably do something right now to take advantage of all these opportunities,” he said.

The company expects to grow more than 100 percent this year from last, after its endpoint security platform became a necessity for many businesses as workforces relocated to their homes after the COVID-19 pandemic struck in March. The relocation of workforces caused networks to be expanded and the attack surface to exponentially increase.

SentinelOne also has added products to address both cloud and IoT security needs, Weingarten said. The cloud offering took on added importance as the pandemic moved many enterprises to accelerate their cloud adoption and now makes up 10 percent of SentinelOne’s revenue despite only being introduced last year, he added.

New money and the future

The new money will mainly go toward the company becoming acquisitive, with it looking to both add talent as well as expand its platform, adding cloud modules and other features to address customer needs, Weingarten said.

SentinelOne anticipates similar growth next year and already has reached triple digits in annual recurring revenue, he said.

Those numbers could interest the public market, but Weingarten said the company has no set time frame for an IPO. Rather it will evaluate the market and continue to put in place the necessary processes—such as auditing, compliance and sales cadence—to become a public company when the timing is right, he said.

“I’m not saying (an IPO) can’t happen in 18 months, but we do not have any target right now,” Weingarten said.

The company has been approached in the past by potential acquirers, he said, but it is very interested in building on its own long-term vision.

SentinelOne, founded in 2013, now has raised $696.5 million to date.

According to Crunchbase data, 2020 has been a big year for U.S. security venture funding with several large rounds. Total deal value this year to-date already has surpassed that of last year.

The endpoint market and big money exits

The endpoint market has been valued anywhere between $15 billion and $20 billion, Weingarten said.

Due to that size, the market has seen several shakeups in recent years. Long dominated by the likes of Symantec, McAfee and Microsoft, several newer players emerged over the last decade and realized large money exits.

In November 2018, Blackberry announced it would acquire endpoint security provider Cylance for $1.4 billion, right as that company had reportedly been considering an IPO. Then in August 2019, VMware acquired Carbon Black for $2.1 billion.

In June 2019–between both of those M&A deals—Crowdstrike undertook one of the most successful cybersecurity IPOs in history, nearly doubling its market cap on its first day of trading. Crowdstrike’s market cap now stands at more than $30 billion, more than 4 times its value when it went public.

Illustration: Li-Anne Dias.

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