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Cybersecurity operations provider Arctic Wolf today announced it has closed a $150 million oversubscribed funding round, with participation from Viking Global Investors, Owl Rock, and other investors. The funds, which bring the company’s total raised to $498 million and valuation to $4.3 billion, will be put toward new products and features that augment Arctic Wolf’s use for enterprises and mid-market organizations, according to CEO Brian NeSmith.
Worldwide spending on information security and risk management technology and services is forecast to reach $150.4 billion in 2021, according to Gartner. But some existing solutions are reactive in nature, lacking a holistic approach to the security lifecycle. According to a 2019 Censuswide survey commissioned by monitoring platform Panaseer, nearly 90% of security leaders say they don’t have adequate visibility into the data they’re required to protect.
NeSmith and Kim Tremblay cofounded Arctic Wolf in 2012, spurred on by the belief that cybersecurity had an “effectiveness problem.” The Eden Prairie, Minnesota-based company originally built its solutions to target midsize enterprises that couldn’t afford to staff a dedicated security team. But more recently, Arctic Wolf began pitching its products in enterprise markets, including in Europe, the Middle East, and Africa, launching security awareness and training programs, as well as a restructured partner program with new tiers and support services.
“The hybrid work dynamics brought about by the pandemic accelerated the growth of Arctic Wolf’s business. Throughout 2020 and 2021, organizations of all sizes realized that it is challenging for them to protect their business-critical data and systems when employees are working in both traditional offices and from home. It triggered a digital transformation trend that is a long-term driver for our business and next-gen security spending in general,” NeSmith told VentureBeat via email. “Most organizations receive hundreds of alerts per day from dozens of disparate security tools they’ve deployed. The Arctic Wolf platform unifies an organization’s security tools and uses machine learning to eliminate security alert fatigue for most organizations.”
Arctic Wolf’s cloud-based operations platform taps organizations’ existing silos for data to centralize, enrich, correlate, and analyze. A number of tools from Symantec, Cisco, Dell-owned SecureWorks, Rapid7, and Alert Logic already accomplish this, but Arctic Wolf’s key differentiator is its concierge security teams, according to NeSmith. Experts from the company monitor organizations’ data and learn their business and requirements, optimizing Arctic Wolf’s software for their particular environment.
“Our concierge security teams can work with our customers on day-to-day tactical items while also helping them with security strategy and ensuring they advance along their personalized security journey,” NeSmith said. “[The teams] continuously monitor security events to provide companies with coverage, security operations expertise, and strategically tailored security recommendations to … improve their overall posture.”
The Arctic Wolf platform takes in over 1.2 trillion observations each week, NeSmith says, delivering around five validated incidents and remediation recommendations for the average customer. Today roughly 3,000 organizations are using the platform, which has 650 global partners and over 40,000 trained sellers.
“We have doubled sales for seven consecutive years, our valuation tripled in just eight months, and [we] were named the 25th-fastest-growing company by Deloitte,” NeSmith added. “In the past year, Arctic Wolf has seen significant momentum in the large enterprise market, with annual recurring revenue growing by 438% … As we grow market share, we are increasingly disrupting leading security companies in the legacy endpoint, network, and cloud security space because their singular technology focus lacks visibility into a customer’s entire IT footprint.”
Arctic Wolf plans to add 500 new roles in the coming year, building on an existing workforce of 850.
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