Investors pour billions in to cybersecurity firms

Venture capital firms and corporate investors have put a record amount of money in to cybersecurity companies over the past year, and there's no end in sight.

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RedSeal, a security analytics company, secures $17 million in a Series C round, bringing their total investment to $56.1 million in five rounds from 11 investors.

RedOwl, a leader in insider risk management and security analytics, raises $17 million in Series B funding led by Allegis Capital. The company will use the new funds to continue its expansion, further build out the product development and data science teams, and to begin broadening its go-to-market efforts.

CounterTack, the leader in Big Data Endpoint Detection and Response (EDR), closes a $15 million Series C round of funding, led by TenEleven Ventures, with other new investors in the round including EDBI (the corporate investment arm of the Singapore Economic Development Board), along with the participation of existing investors.

Cryptzone, a provider of dynamic, context-aware network, application and content security solutions, closes a $15 million Series B round of funding. The round was led by Kayne Partners, the growth private equity group of Kayne Anderson Capital Advisors, L.P., an approximately $29-billion alternative investment firm. Additionally, existing investor Medina Capital and a number of its limited partners participated in the round. The funding will accelerate Cryptzone’s go-to-market strategy and fuel its global expansion.

Barkly, an endpoint security startup, closes a $12.5 million Series A financing round, led by New Enterprise Associates (NEA) and including Sigma Prime Ventures. Barkly has now raised a total of $17 million since the company was co-founded in 2013 by Mike Duffy and Jack Danahy, longtime colleagues, information security industry veterans and serial entrepreneurs. The funding will be used to expedite the company’s recruiting, product development, and go-to-market initiatives in the healthcare and financial services industries.

Recorded Future, a real-time threat intelligence vendor, raises $12 million in Series D funding, led by Reed Elsevier Ventures.

Keybase raises a $10.8 million Series A, led by VC firm Andreessen Horowitz. Keybase started as a PGP keyserver hobby project, aimed at making key lookups as easy as knowing someone’s username. The company has gotten more ambitious and it has a new goal – to bring public key crypto to everyone in the world, and they are are building open source apps that anyone can use.

enSilo, an Israeli cybersecurity startup which has relocated its corporate headquarters to the west coast, raises $10 million in Series A financing. The round was led by Lightspeed Venture Partners with additional investment from existing backer Carmel Ventures. The new investment will be used to expand the company’s global operations, in particular in the North America market, and to open U.S. offices on the West Coast.

E8 Security, provider of cyber security analytics solutions to help enterprises detect and manage malicious insider threats and targeted cyber attacks, closes $9.8 million in series A funding led by March Capital Partners, with participation from Allegis Capital and The Hive. The funding will be allocated to furthering product development, currently in private beta with several large domestic and international organizations, while also expanding the organization’s engineering and development teams.

WireX, a network forensics company, raises $9.3 million led by Vertex Venture Capital. The financing round also included participation from existing investors Magma Venture Capital, Entrée Capital and a group of serial entrepreneurs Mickey Boodaei, co-founder of Imperva and Trusteer, Rakesh Loonkar, co-founder of Trusteer and Idan Plotnik, founder of Aorato (acquired by Microsoft). Funding will be used to expand the Israeli-based R&D center and establish headquarters in the U.S.

TrapX Security, a global leader in deception-based cyber security defense, raises $9 million in its Series B round, led by investors Intel Capital and Liberty Israel Venture Fund together with current investors BRM Group and Opus Capital. The investment will be used to accelerate growth across the business, spanning the development of deception technology, the hiring of engineering and marketing talent, and the expansion of global sales initiatives. Headcount is expected to grow by 40 percent globally within the next year to accommodate the increase in customer demand.

Signifyd, the fastest growing provider of fraud protection for e-commerce businesses, raises $7 million in a Series A round of financing led by Allegis Capital with participation from Resolute Ventures, IA Ventures, QED Investors, Lucas Ventures and Tekton Ventures. This brings the company’s total funding to $11.2 million since its founding by two PayPal veterans.

Illusive Networks raises $5 million in Series A funding from cybersecurity think tank Team 8, which is a partner with Innovation Endeavors, the VC firm founded by Google Chairman Eric Schmidt.

SafeBreach, an Israeli cybersecurity company, raises $4 million from Sequoia Capital and serial entrepreneur and angel Shlomo Kramer. The investment is the first for SafeBreach, which plans to use the money from the financing round to expand its development in Israel and its North American business.

Twistlock, an enterprise security suite for virtual containers, raises $2.5 million in funding from YL Ventures.

VS2, a.k.a. Virtual Software Systems, raises $2 million in seed funding to develop a new way to neutralize cyberattacks after a breach. Investors in the round included Bulldog Investors and Sequel Capital Management.

ThreatQuotient, a cyber security software firm, raises $1.5 million in a seed round of funding led by Blu Venture Investors, Center for Innovative Technology, and the Virginia Tech Investor Network (VTIN) which includes angel investor Todd Headley, the former Chief Financial Officer at Sourcefire. This initial funding will be used to expand the company’s go-to-market reach through both direct and channel partner activities and to further enhance ThreatQ, the company’s threat intelligence platform (TIP).

Next week we take a look at some recent cybersecurity IPOs, and some planned offerings in the latter part of 2015.

Copyright © 2015 IDG Communications, Inc.

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