WhiteSource closed a $75 million Series D as the company looks to expand its product offering and at possible acquisition targets.
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The round was led by Pitango Growth, with participation from existing investors M12, Susquehanna Growth Equity and 83North. The Tel Aviv-based company — which has U.S. headquarters in Boston — now has raised a total $121.2 million in funding since being founded in 2011.
WhiteSource helps application developers find vulnerabilities in code, cutting off potential issues early in the development stage.
“Application security strives to help those that develop software eliminate vulnerabilities so it’s less susceptible to attacks,” said co-founder and CEO Rami Sass.
The company plans to use the new funding to expand its offerings and capabilities to reach beyond the open-source code it currently secures and move into finding vulnerabilities in the proprietary code, Sass said. It’s estimated companies use about 25 percent proprietary or custom code in application development, he added.
WhiteSource already has done a lot of work internally on adding proprietary code security, but also may seek to add “complementary” technology and is “actively engaged” with potential acquisition targets, Sass said.
Everybody makes software
With so many retail, financial service and other companies developing their own applications, there is competition in the race to help secure them. Boston-based Snyk just closed a $300 million round last month at a $4.7 billion valuation, and publicly traded Synopsys — which has made acquisitions in the space — also offers its own application security platform.
Even with that competition, WhiteSource has grown revenue 800 percent in the last three years and is closing in on 1,000 customers, Sass said.
Martin Angert, a director at Susquehanna, said with every company becoming a software and application developer, the market for security is growing.
“To me, the most attractive thing was just seeing the product need and demand,” he said, adding companies from retail to insurance are realizing it’s their software that helps differentiate them.
“What they are discovering is the way they win is through software,” Angert said. “All these companies are realizing they are software companies.”
Sass said the growing market could help WhiteSource be IPO-ready in as little as two to three years.
“We are not as far away as some may think,” he said.
Illustration: Li-Anne Dias.
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