Cloud Security Firm vArmour Secures $58 Million in Funding

Over the past year, organizations have increasingly migrated their operations to cloud environments – frequently employing multi-cloud strategies. This trend has resulted in extensive and often intricate networks of services. vArmour, a company specializing in real-time management and security for applications and users within these fragmented environments, has announced a new funding round to meet growing demand for its solutions.

Funding Details and Future Plans

The Bay Area-based startup has successfully raised $58 million in an oversubscribed funding round. The investment was co-led by AllegisCyber Capital and NightDragon, both existing investors. Additional participation came from Standard Chartered Ventures, Highland Capital Partners, Telstra, Redline Capital, and EDBI.

According to CEO Tim Eades, this financing round is anticipated to be the company’s last before pursuing an Initial Public Offering (IPO).

Eades stated in an interview that 2020 was a particularly strong year, with companies accelerating their cloud adoption. He noted that annual recurring revenue doubled year-over-year. The company observed a shift from approximately 10% of business processes residing in the cloud to over 50% within the last year. The company’s current focus is preparing for a potential public market debut, possibly within two to 2.5 years.

As part of its IPO preparations, vArmour appointed a CFO, Chris Dentiste, last October. Dentiste previously served as CFO of RSA. Eades explained that Dentiste’s role is to identify the optimal timing for the IPO, while his own responsibility is to ensure the company has sufficient resources, which it currently does.

Strategic Acquisitions and Innovation

The company is also considering potential acquisitions to further expand its capabilities. The recent establishment of an AI lab in Calgary, Canada, suggests a potential area for future investment and growth.

While vArmour has not disclosed its valuation, Eades confirmed that it represents a substantial increase over previous rounds. To date, the company has raised a total of $197 million.

In a prior funding round in 2019 – a $44 million investment also led by AllegisCyber Capital and NightDragon – PitchBook estimated the company’s valuation at $420 million, a figure vArmour did not refute at the time.

Addressing Complex Enterprise Challenges

Founded by Roger Lian and Michael Shieh, vArmour spent its initial three years in stealth mode, developing its technology, securing funding, and building a customer base.

The company’s clientele includes organizations in sectors such as telecommunications – with Telstra as a strategic backer – and financial services.

These industries highlight the core challenges that vArmour addresses. Many established businesses in critical sectors predate the modern digital landscape.

While undergoing “digital transformation,” this evolution is often complex and gradual. Adopting new technologies can be a slow process, and changes within large enterprises are typically incremental, impacting specific services, regions, or departments.

This fragmented environment presents numerous opportunities for malicious actors to exploit vulnerabilities. For internal teams, monitoring networks, identifying threats, and responding effectively becomes significantly more challenging. vArmour refers to this concept as “Application Relationship Management.”

Expanding Capabilities and Market Position

CEO Tim Eades, with experience at IBM and leading startups acquired by larger tech companies, understands the complexities from both the user and provider perspectives. This understanding forms the foundation of vArmour’s approach to problem-solving.

Initially focused on application policy management and security insights, the company has expanded its offerings with the recent launch of identity access management capabilities.

However, this is likely just one step in addressing the ongoing challenges posed by network growth, continued digital migration, and the emergence of new technologies within organizations.

It’s worth noting that vArmour is not the only player in this space; for example, Palo Alto Networks recently acquired Bridgecrew to enhance its automated security monitoring services for DevOps teams.

Industry Validation

“Managing risk and resiliency in the hybrid cloud is one of the most significant security challenges for enterprises,” stated Bob Ackerman, founder and managing director at AllegisCyber Capital. “vArmour’s platform provides the visibility, controls, and accountability necessary to actively manage these challenges and has done this for hundreds of customers. We are ecstatic to be part of their next stage of growth.”

Dave DeWalt, founder of NightDragon, added, “As applications become more complex, more distributed, and more targeted by attackers, the importance of full visibility into the relationships between applications becomes increasingly important. vArmour’s approach to application relationship management ensures that enterprises of all sizes can continuously audit, respond, and control identity relationships to best protect their important IP, and mitigate risk to the business.”

This article has been updated to correct the names of the founders.