San Francisco-based Sysdig raised a $188 million Series F at a $1.19 billion valuation as developer and container security remains hot among investors.
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The company now has raised a total of $394 million since being founded in 2014.
Sysdig provides both cloud and container security for enterprises and their DevOps teams. Using containers has become extremely popular in the last several years to build applications — with open-source platform Kubernetes becoming the dominant way to deploy and manage those containers — as more companies move to the cloud and build their own software.
“From our point of view, we are at an inflection point in the market,” said CEO Suresh Vasudevan.
The accelerated adoption of cloud has helped Sysdig grow new annual contract value in the second half of last year 2.3x compared to the same time in 2019. The company now has 450 enterprise customers with an average annual recurring revenue of more than $500,000 for its top 50 contracts.
Cloud, Kuberbnetes security seeing heat
Sysdig’s latest raise further illustrates the increased interest investors have in Kubernetes, containers and securing cloud applications as more companies move to the cloud.
In January, San Jose-based Lacework — providing a cloud security platform including securing workloads in Kubernetes — closed a $525 million round valuing the company at more than $1 billion. In March, Los Angeles-based cloud security provider Orca Security landed a $210 million Series C — giving it a $1.2 billion valuation.
Deal-making also is hot in the space, with IBM’s Red Hat acquiring Mountain View-based Kubernetes-native security platform StackRox for an undisclosed amount in February. Rapid7 also bought Israel-based Kubernetes security provider Alcide for about $50 million in that same month.
“Investors have realized this space is for real,” said Ping Li, a partner at Accel. “There is a lot of money coming into this category.”
Li said investing in Sysdig was an easy decision with every application being rebuilt in the cloud and security budgets expanding.
Vasudevan said he has no doubt this area of security will produce large independent companies — comparing it to the endpoint space in cybersecurity that has birthed companies like CrowdStrike, SentinelOne and others.
“We are just barely getting started,” he said.
Illustration: Dom Guzman
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