Ellicott City-based cyber startup Huntress landed a $40 million investment in a Series B round led by Baltimore-based investor JMI Equity.
The funding, which also includes participation from existing investors ForgePoint Capital and Columbia-based Gula Tech Adventures, comes a little over a year after the company’s $18 million Series A. It has since doubled revenue to just over $10 million, grown the team from 20 to nearly 100 employees, and acquired technology from San Antonio startup Level Effect along the way. The new funding will help a company founded by former NSA threat hunters enter a new phase to grow its efforts to bring advanced cybersecurity tools to small and medium-sized businesses, which it dubs “the 99%” of the cyber market.
“Before it was proving out this platform that was going to bring cyber to small businesses,” CEO Kyle Hanslovan said. “Now this is all about building the cyber platform for the small and medium-sized businesses. It’s not about being a platform but truly the platform for it all.”
It comes at a time when a desire for cybersecurity tools has increased, as “hackers turned up the heat even harder” during the pandemic. The company has played a key role in advancing understanding of some of those high-profile attacks. When Microsoft found that Chinese attackers targeted on-premises Exchange servers in March, Huntress experts spoke up to say their analysis of small businesses showed that the breaches were bigger in scale than the “limited and targeted attacks” the tech giant initially characterized them as.
. @HuntressLabs has challenged @Microsoft’s claim that Chinese hackers executed “limited and targeted attacks” against on-premises Exchange servers, arguing the scope of compromise is fairly widespread: https://t.co/LgOwL72mHD#HAFNIUM #security pic.twitter.com/iUEttZ7gc1
— CRN (@CRN) March 3, 2021
Such moves give it influence. When it comes to the market, the company sees more small and-medium-sized businesses working with outsourced IT and cyber service providers, which are the kinds of firms that Huntress partners works with to sell its product. Through this “one to many” approach, which is common for cyber companies with business-focused products, Huntress said the platform is now used by 25,000 end customers via 1,500 resellers.
It meant tailoring a product for its market: Compared with larger enterprises that many of the cybersecurity platforms coming on the market are made for, small businesses typically have less budget for cybersecurity and don’t employ the experts to run them.
“Everybody kept pitching, here’s this platform usable by experts. Nobody realized that the real problem was, don’t make a product that’s usable by experts,” Hanslovan said. “The problem was, how do you make that junior person into the expert.”
With the funding, the company plans to add capabilities, whether that’s the ability to manage antivirus and firewalls, or increasing visibility into network traffic and cloud-based email. That’ll bring growth on the engineering team, including bolstering an engineering team of eight to nearly 30 people — part of plans to grow the team to 200 people in the next 18 months. (Check out its current open roles.) It could also add technology through future acquisitions.
The Maryland company is also building with local talent. It recently added execs like VP of People Lynn Shintani, SVP of Product and Engineering Dina Bruzek, a former VP of engineering at Columbia cyber success story Sourcefire, and VP of Threat Operations Roger Koehler, who brings experience from DoD installations in the region.
Going forward, a big portion of energy will go toward educating the market of small businesses that might not know tools exist to be able to prevent threats before they become a problem. There’s a bit of work to bring together the IT community as well, as seen through the company’s recent hack_it 2021 cybersecurity training session.
The company’s story so far offers a look at former NSAers from an area that’s known as the hotbed of talent for cyber forming a startup that is executing on the high-growth principles honed on the West Coast. That ultimately helped attract an investor like JMI, which has offices in Harbor East as well as San Diego.
“We’re thrilled to partner with Huntress to deliver comprehensive cybersecurity services to a massive and largely underserved market of SMBs,” said Suken Vakil, general partner at JMI, in a statement. “Their team’s commitment to protecting, educating and enabling these organizations that are being actively exploited is second to none.”