How Lacework Became a Cybersecurity Innovator
Lacework’s automated cybersecurity platform has helped the company land an $8.3 billion valuation
It is no secret that COVID has precipitated a paradigm shift in the logistical operations of companies across the globe. Perhaps nowhere are these changes more pronounced than in how organizations have addressed their cloud infrastructure. As large enterprises have increasingly moved critical workloads and data to the cloud to support the capabilities of work from home employees, the need to secure this information has become more urgent.
The International Data Corporation (IDC) recently published a report based on a survey of 200 U.S. CISOs and security executives. According to the report, 98% of companies surveyed in H1 2021 experienced at least one cloud data breach in the past 18 months. At the same time, 31% of respondents said they’re spending more than $50 million per year on cloud infrastructure, opening them up to additional attacks if their cloud environments aren’t configured correctly. In its 2021 Cloud Security Study, it was found that only 17% of companies encrypt more than 50% of sensitive data that they host on cloud environments — despite the surge in ransomware attacks.
Security at Scale
Enter Lacework, a cybersecurity company whose cloud security platform was designed specifically to tackle this problem head on. Lacework’s proprietary Polygraph system analyzes information across an enterprise’s AWS, Azure, GCP, and Kubernetes environments, extracting meaningful security events from massive data sets.
Co-CEO Jay Parikh summarized, “[Lacework] uses unsupervised or autonomous machine learning, behavioral analytics, and anomaly detection to uncover unknown threats, misconfigurations, known bads, and outliers across [environments.] The platform automatically learns activities and behaviors that are unique to each of our customer’s environments, creates a baseline, and surfaces unexpected changes so they can uncover potential issues and threats before they become significant problems.”
On November 18, 2021, Lacework announced a $1.3 billion Series D, bringing the company to an $8.3 billion valuation, the largest financing round in security history.1 The Series D round was led by existing investors Sutter Hill Ventures, Altimeter Capital, D1 Capital Partners, and Tiger Global Management.
Multiple Alumni Ventures funds have invested in Lacework, including Spike Ventures (for the Stanford community), Strawberry Creek Ventures (for the UC Berkeley community), Triphammer Ventures (for the Cornell community), The Yard Ventures (for the Harvard community), and AV’s Total Access Fund. Along with this latest Series D, Alumni Ventures previously invested in Lacework’s $24 million Series B in 2018 and a $525 million growth round earlier in 2021, both also led by Sutter Hill.2
Lacework reported that it intends to use the recent funding to expand its addressable market into EMEA and APAC while further advancing the features and customization of its Polygraph system. Additional strategic acquisitions might also be on the horizon, like its recently announced Soluble transaction. With 3x year-over-year revenue growth, untapped markets in Europe and Asia, and significant partnerships with Snowflake, Amazon Web Services, Google Cloud Platform, and Microsoft Azure, Lacework appears to be well positioned to continue its incredible growth story.
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1Funding amounts and current valuation should not be considered to be reflective of any fund’s or investor’s investment performance.
2To see the performance of each exited investment for all Alumni Ventures funds over the last twelve months and our historical performance since 2014, click here.