Aqua Security Raises $135M at $1B Valuation

Aqua Security Secures $135 Million in Series E Funding

Aqua Security, a security startup headquartered in Boston and Tel Aviv, specializing in cloud-native service protection, has announced the successful completion of a $135 million Series E funding round. This investment brings the company’s valuation to $1 billion.

Investment Details

ION Crossover Partners spearheaded the funding round. Participation also came from existing investors including M12 Ventures, Lightspeed Venture Partners, Insight Partners, TLV Partners, Greenspring Associates, and Acrew Capital. Since its founding in 2015, Aqua Security has accumulated a total of $265 million in funding.

Early Focus on Container Security

The company distinguished itself as one of the first to concentrate on safeguarding container deployments. Unlike many competitors who were subsequently acquired, Aqua has maintained its independence and is now positioned for a potential Initial Public Offering (IPO).

Initially, the industry’s attention centered on Docker and Docker containers. However, this focus rapidly transitioned to Kubernetes, which has since become the industry standard. Currently, businesses are also evaluating serverless technologies and other innovations built upon this evolving infrastructure.

CEO Insights

“Organizations that were previously experimenting with diverse technologies are now confronting a fundamentally different technology stack, ecosystem, and a new set of security challenges,” stated Aqua CEO Dror Davidoff. This shift has spurred the emergence of numerous startups, each addressing specific components of the stack.

Davidoff emphasizes that Aqua’s success stems from two key factors: 1) establishing itself as the leading solution for container security and 2) recognizing the necessity of evolving into a comprehensive platform capable of securing the entire cloud-native environment. Approximately two years ago, the company transitioned from a product-centric approach to a platform-based strategy.

Platform Approach and Competitive Advantage

“We observed a wave of acquisitions by companies like CheckPoint, Palo Alto Networks, and Trend Micro,” Davidoff explained. “These firms sought to acquire individual pieces and assemble a more complete offering.”

“Aqua’s significant advantage lay in having a natively built, unified platform. Today, the conversation revolves around cloud-native security, rather than ‘container security’ or ‘serverless security.’ Aqua is, in effect, the most extensive cloud-native security platform available.”

Commitment to Open Source

A notable aspect of Aqua’s strategy is its continued support for open-source initiatives. For instance, Trivy, its open-source vulnerability scanner, serves as the default scanner for GitLab’s Harbor Registry and the CNCF’s Artifact Hub.

“We are likely the foremost security player in the open-source realm because we not only protect against vulnerabilities in open-source software but also actively contribute to the open-source community,” Davidoff asserted. “We provide open-source tools to the community and maintain a dedicated open-source team to foster continuous development. Being an integral part of the community enhances our understanding and enables us to deliver the most effective tools.”

Growth and Future Plans

In 2020, Aqua, which primarily serves mid-sized and large enterprises, experienced a doubling of its paying customer base. Currently, over half a dozen customers generate an Annual Recurring Revenue (ARR) exceeding $1 million.

Davidoff indicated that the company was not actively seeking additional funding, as its previous round concluded just a year ago. However, the team determined that accelerating its current strategy warranted raising capital sooner than initially anticipated. ION Crossover Partners had expressed interest in collaborating with Aqua, and after considering other options, the company selected ION as the lead investor, with participation from all existing investors.

“Our objectives include expanding our product capabilities, enhancing our go-to-market strategies, and broadening our geographical reach. We are also exploring potential acquisitions, facilitated by our robust platform. I am confident in our ability to achieve significant growth, and the market opportunity supports our ambitious vision.”