As the cloud industry flourished in 2020, so did the demand for cybersecurity services that offer security to companies moving their networks to cloud vendors. Last year, Gartner forecasted that spending on cloud security services would grow 33% year-over-year to $585 million.
The cybersecurity market is projected to be worth $300 billion by 2024. Juniper Research forecasts the number of digital records stolen in 2023 at 33 billion, compared with the 12 billion stolen in 2018. And other analysts estimate that the cybercrime economy has grown to $1.5 trillion in annual profits and that damages will reach $6 trillion by 2021.
While 2020 was a challenging year for many businesses, San Jose company Lacework achieved 300% revenue growth as many companies accelerated their evolution to cloud environments and needed to secure workloads in cloud environments.
Lacework’s solution helps secure businesses as they build on public clouds like Amazon Web Services, Microsoft Azure, and Google Cloud Platform. It also provides security for containers and Kubernetes. Established in 2015, well before the boom in cloud security services, Lacework’s offerings weren’t exactly in demand. “Before COVID hit we were like ‘oh god, what's going to happen?’” CEO Dan Hubbard explains. “Much to our surprise, COVID was a forcing function for many of our customers to migrate to the cloud.”
This accelerated shift to the cloud put Lacework’s software in demand, and now the San Jose-based company has closed a $525 million growth round at a valuation of more than $1 billion.
The round was led by Sutter Hill Ventures and Altimeter Capital and included participation from D1 Capital Partners, Coatue, Dragoneer Investment Group, Liberty Global Ventures, Snowflake Ventures, and Tiger Global Management.
Laceworks plans to use the new funds for product development, sales, and market and international expansion, with a focus on Europe. The company also plans to more than double its 220-person team by the end of the year.
Going into 2021, Hubbard says Lacework will use half a billion dollars in funding to propel the company to a market leader position, though it still has a way to go before it truly sizes up to public cybersecurity giants. “We see this market moving very very fast, and it’s maturing underneath us,” he says. “It’s a time to gain massive market share.”