Devo Technology, a startup developing cloud logging and cybersecurity products, today announced that it raised $250 million in a series E funding round valuing the company at $1.5 billion. TCV led the investment along with General Atlantic, Eurazeo, Bessemer Venture Partners, Insight Partners, Georgian, and Kibo Ventures, which brings Devo’s total funds raised to more than $400 million.
CEO Marc van Zadelhoff says that the money will be put toward “aggressive growth” across new regions and verticals and “significantly increas[ing] investment” in channel expansion and product R&D.
“Our founders were part of a security team at a large bank and saw first-hand the challenges security teams face with the explosion of data associated with the shift to the cloud. They founded Devo to solve these challenges and give security teams what they never had — the ability to see instantly what is happening in their environment and respond to security incidents in real time,” van Zadelhoff told VentureBeat via email.
Growth in cybersecurity
Devo’s expansion comes as cybersecurity startups are securing record amounts of capital from venture firms. According to Pitchbook, with over two months left in 2021, cybersecurity startups have raised $17.7 billion in venture capital so far — a more than 70% increase from last year’s $10.2 billion. If the current trend holds, the global cybersecurity industry could net $345.4 billion in revenue by 2026, Statista predicts, up from $217.9 billion in 2021.
Driving the climb is a rise in cybersecurity attacks brought about by pandemic-related disruptions, particularly the move to hybrid and remote work. Data breaches exposed 36 billion records in the first half of 2020, as per RiskBased Security, and Varonis estimates that only 5% of companies’ folders are properly protected, on average. In a recent Accenture survey, 68% of business leaders told the consultancy that they feel their cybersecurity risks are increasing, while almost 80% believe that they’re introducing technology faster than their ability to secure it.
Cambridge, Massachusetts-based Devo, which was founded in 2011 by Pedro Castillo, integrates with existing data sources and infrastructure to offer querying capabilities, real-time alerting, data aggregations that automatically summarize data, and up to 400 days of logs. Devo enriches, correlates, and visualizes security data through workflows, streaming metrics to apps like PagerDuty and Slack for IT teams and others in customers’ organizations.
Devo claims that its technology can collect nearly any log type from software and devices, ingesting up to 1 million events per second. Beyond this, the company delivers a workbench that allows users to tap prebuilt machine learning models or craft their own, deploying them to make predictions. Devo’s models can be leveraged to track anomalous activity in network service stacks, drawing on log, metric, and trace data across environments to compare system-level trends that might lead to outages or degradations.
“Devo has both out-of-the-box machine learning as well as the ability to bring your own models,” van Zadelhoff explained. “Examples of out-the-box models include modeling the behavior of endpoints to determine if they usually act as a client or server in relation to other endpoints, and to detect anomalies in this client or server behavior. Once this entity modeling has taken place, another model assesses whether the current behavior of that entity is suspicious or not based on its classification and statistical baselines. Devo [also] does statistical baselines of individual metrics or groups of metrics, [and] it uses machine learning for dynamic alerts of metrics outside of statistical baselines and to predict what the values of metrics will be in the future based on the statistical baselines.”
Devo competes with companies like Splunk, Elastic, Sumo Logic, HP-owned ArcSight, and Waltham, Massachusetts-based Uptycs, which adopts a telemetry-powered approach to cloud workload protection and security management. But Devo says that in the past year, both revenue and customers have increased 100% year-over-year, with brands including H&R Block, FanDuel, and Amex Global Business Travel joining Devo’s 100-company-strong client base.
“Devo was quick to recognize the changing threat model for businesses and the need for organizations to start thinking cloud-first in the pandemic-induced ‘new normal.’ As a result of Devo’s quick response to organizations’ changing needs, the company has doubled its number of customers and … growth,” van Zadelhoff added. “Revenues are substantial [and] will enable us to get to initial public offering range in two to three years.”
Devo currently has over 400 employees across its offices in North America, Europe, and Asia-Pacific.
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