Devo Raises $250M at Unicorn Valuation - Cybersecurity Demand

Devo Secures $250 Million in Funding

Devo, a startup headquartered in the Boston metropolitan area specializing in log management and cybersecurity solutions, has announced the completion of a $250 million funding round this morning.

This new investment brings the company’s valuation to $1.5 billion.

Series E Funding Details

The funding round, designated as a Series E, was spearheaded by TCV. Additional participation came from new investors, including General Atlantic and Eurazeo.

Existing investors also contributed to the round, which Devo revealed to TechCrunch was secured four months earlier than anticipated and was oversubscribed by a factor of four.

Driving Factors Behind the Investment

The significant investor interest can be attributed to substantial revenue growth. According to CEO Marc van Zadelhoff, Devo experienced a doubling of revenue, employee count, and customer base over the past year.

Van Zadelhoff further stated that the company aims to replicate this growth in the next twelve months.

Growth Trajectory and IPO Plans

Doubling in size is a frequent objective for companies at this stage of development. Achieving 100% growth is often considered a benchmark for scaling towards a potential Initial Public Offering (IPO).

Devo proactively discussed its plans for an IPO, indicating that the newly acquired capital will facilitate preparations for going public within approximately two years.

It is anticipated that Devo will either proceed with its IPO using this funding or potentially secure an additional round of investment before filing an S-1.

Devo’s Core Business

Beyond the financial details, it’s important to understand the company’s primary function.

Devo provides solutions centered around log management and bolstering cybersecurity defenses.

The company’s technology assists organizations in analyzing and securing their digital infrastructure.

What Exactly is Log Management?

In the language of business, Devo positions itself as a provider of “cloud-native logging and security analytics.” However, if this description lacks clarity, that’s perfectly understandable.

Every interaction with a digital product generates a log file – a record detailing who performed what action on which product at a specific time. Large organizations accumulate vast quantities of these files due to their extensive user base and diverse product offerings.

Essentially, Devo provides a service that aggregates these log files from its clients into a centralized storage system. This data is retained for 400 days, ensuring rapid accessibility. Devo then leverages this stored data with two distinct products: one concentrating on cybersecurity and the other on IT support. According to Per van Zadelhoff, the cybersecurity tool is the more widely adopted of the two.

The underlying log platform supports both products. To illustrate this concept, consider an analogy discussed with Devo’s CEO: A company’s combined log files can be likened to a broth or stock. Devo’s cybersecurity and IT solutions are then comparable to different soups created from this same base liquid. The core foundation remains consistent, but the final product serves a different purpose.

While not a flawless comparison, it aims to provide a clearer understanding.

TechCrunch inquired about the 400-day retention period. This timeframe provides a full year of log data, plus an additional month for year-over-year analysis. This duration appears logical and well-considered.

The rationale behind not storing data for longer periods likely involves diminishing returns, considering the immense data volumes. However, decreasing storage and processing costs could potentially enable an expansion of this window in the future. Time will tell.

Devo plans to utilize its recent funding to expand its workforce, a common practice for growing tech companies. Additionally, the company intends to facilitate the development of applications built on its log platform and pursue international growth. Strategic acquisitions are also being considered.