Arctic Wolf Raises $150M Series F, Tripling Valuation

Arctic Wolf Secures $150 Million in Series F Funding

Arctic Wolf, a provider of managed cybersecurity services operating under a “security operations-as-a-concierge” model, has successfully completed a $150 million Series F funding round.

Viking Global Investors and Owl Rock spearheaded this investment, alongside contributions from existing investors. This financing arrives less than a year following the company’s previous funding event, where it achieved a milestone as the first managed detection and response (MDR) firm to surpass a $1 billion valuation.

Funding and Valuation Growth

The recent funding brings the total capital raised by Arctic Wolf to nearly $500 million. Consequently, the company’s valuation has experienced a substantial increase, moving from $1.3 billion to $4.3 billion.

According to Arctic Wolf CEO Brian NeSmith, this investment reflects a shared understanding of the current challenges within the cybersecurity sector, as reported to TechCrunch.

Rapid Expansion Driven by Market Demands

The evolving cybersecurity environment, intensified by pandemic-related disruptions and the widespread adoption of remote work, has spurred significant growth for Arctic Wolf over the past year.

The company delivers continuous security monitoring to small and medium-sized businesses via its cloud-based security operations platform. Revenue has doubled due to accelerated platform adoption, with approximately 60% of its 3,000 clients utilizing at least three of its security solutions.

Arctic Wolf asserts that this positions it as the fastest-growing company of its size within the rapidly expanding cybersecurity market.

Increased Headcount and Strategic Acquisitions

The company has significantly expanded its workforce, adding roughly 400 employees in the last 12 months. Plans are in place to recruit an additional 500 personnel in the coming year.

NeSmith stated that the new funds will be allocated to sustaining this momentum and bolstering the company’s mergers and acquisitions (M&A) strategy.

Since its founding in 2012, Arctic Wolf has completed three acquisitions, including the 2018 purchase of cybersecurity vulnerability assessment company RootSecure. The company intends to substantially increase its acquisition activity over the next 12 months.

“We currently have letters of intent for additional acquisitions, and anticipate completing between five and ten deals in the next year,” NeSmith explained.

Future Outlook: Potential IPO

With the Series F funding secured, Arctic Wolf is now focusing on potential exit strategies.

NeSmith indicated to TechCrunch that an initial public offering (IPO) is the most probable course of action, although the company is evaluating all available options.

“Ultimately, an IPO appears to be the most likely outcome,” he stated. “Based on recent IPOs, we could potentially be a public company already, but we are taking a measured approach, recognizing that going public simply alters the operational structure of the company.”