Fast-growing North Carolina cybersecurity startup raises $30 million from investors

·4 min read

JupiterOne, a cybersecurity startup based in Morrisville, might be one of the fastest-growing companies in the Triangle at the moment.

Eight months after raising a Series A round from investors worth $19 million, the company has landed another large influx of cash.

Its latest round is valued at $30 million, and the company plans to use the proceeds to chart an aggressive growth plan.

In the past 12 months, the company’s revenues have tripled and its workforce has grown from 20 employees to 50, said Erkang Zheng, the company’s founder and CEO.

By the end of this year, Zheng believes the startup can repeat that same feat, reaching 100 employees and tripling revenue again.

The growth comes as companies are increasing their focus on cybersecurity, Zheng said. In 2020, there was a sevenfold increase in ransomware attacks alone, reported ZDNet, a technology news site.

In just the past few months, there have been several prominent security hacks, including of SolarWinds, a software provider to the U.S. government and prominent companies. Most recently, a ransomware attack shut down the Colonial Pipeline, a vital source of fuel transportation along the East Coast.

“We are not trying to market on fear,” Zheng told The News & Observer, speaking from a new office his company recently moved into in Morrisville.

But, he said, there is a growing realization that more money needs to be invested in this space. Investments into cybersecurity are expected to grow 10% to $60.2 billion this year, according to research firm Canalys.

What does JupiterOne do?

JupiterOne has its roots in a Triangle sweet spot: health care and software. The startup was founded in 2018, after it was spun out of the Morrisville-based health care data firm LifeOmic.

Zheng, an N.C. State University grad and a veteran of the Triangle tech scene, was the chief security officer at LifeOmic.

JupiterOne helps companies monitor their exposure across a broad range of cloud platforms. As more companies choose to offload their digital assets and data storage to cloud providers, it has become more complex to track all the potential entryways hackers and bad actors can take into a company.

JupiterOne’s software helps them identify their potential weak spots.

Already, it has brought on large customers, like social media site Reddit, analytics firm Databricks and the identity management company Auth0.

It also offers a free version of its software that is accessible to small companies. The hope is that as those companies grow, they will eventually need to upgrade to its premium version, Zheng said.

“We could charge those customers if we wanted,” Zheng said. “And many other security companies do.”

But the free version is part of JupiterOne’s mission, said Tyler Shields, the company’s chief marketing officer.

“We believe security is a right,” Shields said.

JupiterOne poised for expansion

JupiterOne’s latest round was led by Sapphire Ventures, a Palo Alto, California-based investment firm that also has put millions of dollars into Raleigh-based software unicorn Pendo.

Zheng said because of how hot the cybersecurity space is at the moment, several investment firms reached out to JupiterOne about investments.

Zheng said Sapphire’s connection with Pendo was just one of the reasons it partnered with the firm. He also noted Sapphire partner Anders Ranum has worked with JFrog and Sumo Logic, two startups that have had successful initial public offerings in the past year.

The company also recently added Latha Maripuri, chief information security officer at Uber, to its board of directors.

The company’s need for talent comes as both Apple and Google have announced major investments in the Triangle. The two tech giants plan to hire thousands of employees in the coming years, pushing an already competitive labor market into overdrive.

“Look, we are absolutely competing with Apple and Google for certain skills,” Zheng said, specifically noting there is a lot of demand for computer engineering talent at the moment.

“But, I do believe a different type of person is usually attracted to a fast-growing startup” than a huge corporation.

Both the pandemic, which has closed tech offices across the country, and the stiff competition for talent has led JupiterOne to be more interested in remote workers than it initially expected.

About half of the company’s workers are now classified as “remote,” Zheng said. But as offices reopen, Zheng said he believes a majority of new hires will be Triangle-based.

There might be some near-term pains, he said. But in the long run, the arrival of Apple and Google should increase the amount of talent in the region.

And after living in the Triangle for the past 20 years, Zheng noted, he’s never seen as much momentum in the region’s tech ecosystem.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate

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