Although venture funding in cybersecurity has taken a slight dip this year—as it has in most sectors—that does not mean large growth rounds do not exist.
Minneapolis-based cybersecurity company NetSPI locked up a $410 million growth investment from private equity giant KKR. The company provides enterprise penetration testing and attack surface management by simulating cyber attacks for large enterprises and helping businesses defend against them.
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KKR initially invested $90 million into NetSPI in May 2021. This new round of funding will recapitalize Sunstone Partners’ stake in the company and allow the firm to exit.
“As we look forward to this next chapter, NetSPI will continue to challenge the status quo in offensive security,” said CEO Aaron Shilts in a release. “With KKR’s support, we are well positioned to amplify our success building the best teams, developing new technologies, and delivering excellence, so that the world’s most prominent organizations can innovate with confidence.”
Founded in 2001, NetSPI has now raised $500 million. It has grown its revenue fivefold and is seeing 61% revenue growth in 2022 to date, according to the company.
Cyber funding
Funding to VC-backed cybersecurity startups is not on pace to hit last year’s high of more than $23 billion, as it was at about $10.3 billion through the first six months of the year, according to Crunchbase data.
That is not surprising considering venture capital as a whole has seen a slowdown. However, it is worth noting cyber startups saw more funding in the first half of the year than in all of 2020, which saw $8.9 billion invested in the industry.
The NetSPI deal also shows KKR’s continued interest in cybersecurity. In May, the firm led a $200 million Series C for Hoboken, New Jersey-based Semperis, an enterprise identity protection provider.
Illustration: Dom Guzman
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