Crime may pay but cybersecurity pays better – at least that’s what shareholders of CrowdStrike must be thinking after their IPO earlier this month valued the company at over $10 billion. The stock was up nearly twice what their initial public offering guide price suggested and was $67.18 at Nasdaq’s close Monday.
Cybersecurity is a Silicon Valley darling and companies that specialize in defending the digital line are feted by media and the masses alike. CrowdStrike’s first fifteen minutes of fame came in 2016 after being asked by Democratic National Committee (DNC) to investigate who breached their cyber-defenses.
“CrowdStrike Services Inc., our Incident Response group, was called by the [DNC]…to respond to a suspected breach. We deployed our IR team and technology and immediately identified two sophisticated adversaries on the network,” the company stated in their report.
“[We] …stand fully by its analysis and findings identifying two separate Russian intelligence-affiliated adversaries present in the DNC network May 2016,” they concluded.
A pair of reformed McAfee execs, co-founders George Kurtz and Dmitri Alperovitch saw the possibilities when legacy cybersecurity companies were a little too slow picking up what hackers were putting down. Thankfully, there was a cocktail napkin handy when Kurtz and Alperovitch sketched out the rough beginnings for a company that didn’t exist yet while out for a meal one day.
CrowdStrike was founded in 2011 and combines proactive intelligence gathering with advanced antivirus, endpoint detection and response technology to provide their customers with the best defense against cyberattacks. Co-founder Dmitri Alperovitch developed an interest in cybersecurity in high school after starting a business with his father.
“I got more interested in the security side of cryptography and encryption and realized early on that no matter how good you were mathematically, if someone was able to steal your keys, then the quality of the algorithm didn’t matter,” Alperovitch said.
After receiving a graduate degree in information security from Georgia Tech, Alperovitch started working at CipherTrust, an online security company that focused on countering spam and phishing attacks launched through email.
Alperovitch learned that things could escalate very quickly after a cyberattack and that’s when he began to appreciate the value of gathering intelligence: “I started infiltrating those underground forums where the spammers were talking about their latest capabilities…That’s something we’ve leveraged heavily at CrowdStrike, to be an intelligence-driven company, so we can stay one step ahead.”
CrowdStrike’s flagship product is the Falcon security platform, touted as “the first multi-tenant, cloud-native, intelligent security” SaaS. At the end of January 2019, they counted 2,500 subscribers of their service.
Despite recording a bottom-line loss over the last three years (largely due to soaring marketing and sales expenses), CrowdStrike is rising to the challenge. Revenue has grown by leaps and bounds since 2017, up almost fivefold with 2017 totals coming in at $53 million to almost $250 million at the end of fiscal 2019 – ending on January 31.