Vectra AI, which provides a cloud-based
service that uses artificial intelligence technology to monitor both on-premise
and cloud-based networks for intrusions, has closed a round of $130 million at
a post-money valuation of $1.2 billion.
The challenge that Vectra is looking to address is that applications —
and the people who use them — will continue to be weak links in a company’s
security set-up, not least because malicious hackers are continually finding
new ways to piece together small movements within them to build, lay and
finally use their traps. While there will continue to be an interesting, and
mostly effective, game of cat-and-mouse around those applications, a service
that works at the network layer is essential as an alternative line of defense,
one that can find those traps before they are used.
“Think about where the cloud is. We are in the wild west,” Hitesh Sheth,
Vectra’s CEO, said in an interview. “The attack surface is so broad and attacks
happen at such a rapid rate that the security concerns have never been higher
at the enterprise. That is driving a lot of what we are doing.”
Sheth said that the funding will be used in two areas. First, to
continue expanding its technology to meet the demands of an ever-growing threat
landscape — it also has a team of researchers who work across the business to
detect new activity and build algorithms to respond to it. And second, for
acquisitions to bring in new technology and potentially more customers.
(Indeed, there has been a proliferation of AI-based cybersecurity
startups in recent years, in areas like digital forensics, application security and specific sectors
like SMBs, all of which complement the platform
that Vectra has built, so you could imagine a number of interesting targets.)
The funding is being led by funds managed by Blackstone Growth, with
unnamed existing investors participating (past backers include Accel, Khosla and TCV, among other financial and strategic
investors). Vectra today largely focuses on enterprises, highly demanding ones
with lots at stake to lose. Blackstone was initially a customer of Vectra’s,
using the company’s flagship Cognito platform, Viral Patel — the senior MD who
led the investment for the firm — pointed out to me.
The company has built some specific products that have been very
prescient in anticipating vulnerabilities in specific applications and
services. While it said that sales of its Cognito platform grew 100% last year,
Cognito Detect for Microsoft
Office 365 (a separate product) sales grew over 700%. Coincidentally,
Microsoft’s cloud apps have faced a wave of malicious threats. Sheth said that
implementing Cognito (or indeed other network security protection) “could have
prevented the SolarWinds hack” for those using it.
“Through our experience as a client of Vectra, we’ve been highly
impressed by their world-class technology and exceptional team,”
John Stecher,
CTO at Blackstone, said in a statement. “They have exactly the types of tools
that technology leaders need to separate the signal from the noise in defending
their organizations from increasingly sophisticated cyber threats. We’re
excited to back Vectra and Hitesh as a strategic partner in the years ahead
supporting their continued growth.”
Looking ahead, Sheth said that endpoint security will not be a focus for
the moment because “in cloud there is so much open territory”. Instead it
partners with the likes of CrowdStrike, SentinelOne, Carbon Black and others.
In terms of what is emerging as a stronger entry point, social media is
increasingly coming to the fore, he said. “Social media tends to be an
effective vector to get in and will remain to be for some time,” he said, with
people impersonating others and suggesting conversations over encrypted
services like WhatsApp. “The moment you move to encryption and exchange any
documents, it’s game over.”
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