Arctic Wolf, a managed cybersecurity company that offers "security operations-as-a-concierge" service, has raised $150 million at Series F.
This round was led by Viking Global Investors, Owl Rock and other existing investors, and lands less than a year after the company’s last round of investment when it became the first managed detection and response (MDR) company to secure a valuation of over $1 billion. This latest round brings its total amount of funding raised to date to just shy of $500 million, and sees the company’s valuation soar from $1.3 billion to $4.3 billion.
“This is a recognition on our part, and our investors’ part, of the challenge that our industry is facing,” Arctic Wolf CEO Brian NeSmith told TechCrunch.
As a result of this challenging cybersecurity landscape, fueled by pandemic turbulence and a mass shift to remote working, Arctic Wolf has seen impressive growth over the last 12 months. The company, which provides round-the-clock security monitoring for small and mid-sized organizations through its cloud security operations platform, saw its revenues double on rapid platform adoption growth, with nearly 60% of its 3,000 customers using at least three of its security operations solutions. This, the company claims, makes it the fastest-growing company at scale in the fastest-growing area of the cybersecurity market.
The company’s headcount has also increased dramatically: The company onboarded approximately 400 employees over the past 12 months and plans to add 500 new roles in the coming year.
The newly raised funds will be used to keep its momentum going, NeSmith said, and to step up its mergers and acquisitions strategy. Arctic Wolf has made three acquisitions since it was founded 2012 — including cybersecurity vulnerability assessment startup RootSecure in 2018 — and it's planning to increase this number significantly over the next 12 months.
“We’ve got letters of intent for a couple more, and I expect that over the next year we’ll probably do between five and 10 acquisitions,” said NeSmith.
With Series F funding under its belt, Arctic Wolf is now starting to think about its exit strategy. NeSmith tells TechCrunch that while the company is weighing up its options, an IPO is likely the next logical move.
“I think ultimately the exit is IPO. That’s the most likely outcome,” he says. “Frankly, from some of the companies I’ve seen IPO over the last three-six months, we could be a public company today. We’re a little more measured, so we want to realize that not being public is an end point, you’re just changing the way you run the company.”