Iboss co-founders Paul Martini, left, and Peter Martini
Photo: John Gastaldo/Zuma Press
The shift to remote work during the coronavirus pandemic helped turn cloud-native cybersecurity companies into Wall Street darlings. Iboss Inc. wants to join the party.
The Boston-based firm has raised $145 million in a bid to capitalize on the accelerated growth in cloud computing in recent months, as many businesses reoriented their budgets away from protecting networks tied to offices and toward securing cloud-based applications.
Iboss plans to staff up its sales and marketing teams to get a piece of the action as the trend continues post-pandemic, Co-Founder and Chief Executive Paul Martini said.
“We want to capture as much of that as possible because once customers switch, it’s pretty sticky,” he said. “The next 24 to 36 months are really important.”
Venture-capital firm NightDragon and private-equity firm Francisco Partners, both based in San Francisco, led Iboss’s growth-financing round. Mr. Martini declined to share the new valuation of his firm, which raised $35 million in Series A funding in 2015.
Cloud-based tools give workers and businesses more flexibility to work across various devices and locations. But they require new investment for some companies and can introduce security threats such as unauthorized access or reduced visibility of networks.
Established cyber vendors have tilted their products toward cloud-based tools to keep up with this shift in demand, while cloud-native upstarts such as publicly traded Zscaler Inc. have reported explosive revenue gains en route to huge investor interest in recent months.
Iboss, founded in 2003, hopes to elbow its way into this latter group and eventually go public. Its cloud-native platform monitors users and data as they pass through connections to access workplace apps like video chatting tools and email clients.
“Think of us as like the equivalent of what the [Transportation Security Administration] is for airports,” Mr. Martini said. “We don’t really care where the traveler is going but we’re gonna open the bags and we’re gonna look for bombs, knives, things like that. In our case, it’s malware, Trojans, any sort of vulnerabilities.”
The cyber sector has been a bright spot amid the economic gloom of the coronavirus pandemic as companies secure remote workers against hacking threats. While security firms soared in public markets in 2020, privately held companies also raised gobs of cash.
Global investments in cyber firms in 2020 totaled $12 billion as of Dec. 15, up from about $4.5 billion during the same period in 2015, according to market intelligence firm CB Insights.
“Funding reached an all-time high this year,” Matt Hopkins, an enterprise-tech analyst with CB Insights, said in a December interview.
Cloud-focused firms have reaped many of the benefits.
Boston-based startup Snyk Ltd., which aims to protect developers, raised $200 million in September. Israeli risk-detection firm Orca Security Ltd. closed a $55 million funding round in December, just a day before another cloud-native security company, Wiz Inc., revealed a $100 million investment.
“Wherever the venture community sees momentum, [that momentum] attracts capital like moths to a flame,” said Bob Ackerman, founder and managing director of venture-capital firm AllegisCyber Capital.
Write to David Uberti at [email protected]
