IBM SoftLayer Founder Launches Cybersecurity Startup: StackPath
StackPath, a cybersecurity company, publicly launched on Monday with $150 million in funding led by Boston-based private equity firm ABRY Partners, and another $30 million by “friends and family” as Crosby states. The company has acquired at least four startups.
The company’s $150-million Series A financing is substantially larger than traditional early-stage rounds, with average Series A tech deals at about $7.8 million, according to venture capital database CB Insights. The raise, which is more than all Dallas-Fort Worth companies combined have raised in any quarter over the past two years, according to the latest MoneyTree report, also represents one of the largest financing rounds for a private cybersecurity firm.
It is always interesting to follow up a well-respected tech executive. Lance Crosby, formerly Founder and CEO of SoftLayer, the cloud computing platform that was acquired by IBM in 2013 to form the foundation of Big Blue's public cloud offering, has found StackPath to build a scalable security platform that houses a suite of services to tackle a spectrum of cyber threats.
“The Internet is where the world does business. It may be the single most important utility supporting businesses today, yet we continue to overtax the ageing infrastructure and struggle to make it secure,” said Lance Crosby, CEO of StackPath, in a statement. “The StackPath platform is an integrated response to a fragmented problem created by too many individual, appliance-based, bolt-on security solutions. It’s time to give businesses internet services that have security built in, not bolted on—so they can be reliable guardians of their most precious assets. We appreciate the support from Abry Partners as we continue our mission of building a path to a secure internet.”
The company developed its own proprietary software, but also bought several technology companies that provide different types of cloud security services for businesses to bolster its offerings: Los Angeles-based next generation content delivery network company MaxCDN; an Israel-based company with patented cloud-based WAF technology Fireblade; and a Seattle-based leading virtual private network (VPN) technology company, which brings secure Wi-Fi for iOS and Mac applications, Cloak and an anti-distributed denial of service (DDOS) technology provider Staminus Communications Inc.
The first service, available this month, is a content delivery network from one of four acquisitions the company has made, MaxCDN. “A CDN makes sense as a first product because it’s a technology client understands and it collects a lot of data,” said Eric Hanselman, Chief Analyst at 451 Research LLC.
Fireblade is a SaaS company that provides website security in the cloud through an innovative behavioral approach to website security, shifting from traditional, costly and obsolete web application firewalls to a modern dynamic approach that relies on users’ behaviors and reputations, rather than signatures. No financial details of the deal were disclosed but sources estimate that the acquisition was for about $20 million. According to StackPath, Fireblade has already been integrated into its platform.
These acquisitions of four cybersecurity startups not only leveraged the service StackPath provides but also brought over 30,000 customers, ranging from Fortune 100 companies down to small startups, which is an impressive number of customers for such an early stage company. Besides buying technology companies and acquiring customers, Crosby has also initiated key hires including Andrew Higginbotham, formerly VP of Cloud at CenturyLink, and Kim Sheehy, former CFO at CyrusOne. He recruited others from his background at IBM/SoftLayer, Google, and Amazon, as well.
According to what StackPath states, it is the first platform to unify enterprise security solutions by leveraging collaborative intelligence that makes each service smarter and more secure with every threat detected, in addition to vastly improving the customer experience:
What’s Special about StackPath
Many developers see security protocols as burdensome and often ignore security policies for the sake of completing their tasks quickly. However, last year, there were more than 400 million identified malware attacks, and the number of new threats more than doubled from 2014, according to Robert Westervelt, an analyst with IDC's security products group. In addition, throughout Crosby’s hosting past and his studies of the cybersecurity industry, he also observed serious flaws in cloud security as well as a gap in products that could scale to tens of millions of machines and rampant disintegration at all levels of data centers, from hardware to networks to applications.
So that’s where StackPath is differentiating itself from other security companies. In order to ease that process, StackPath’s global threat intelligence engine across 35 points-of-presence, which uses machine learning to continually find the most important alerts to help identify and eliminate threats to a system, will be available to customers who integrate the security within their applications via APIs. Its security services will be offered as standalone products and as an integrated suite of services, and they work with both on-premise infrastructure and public clouds, including Amazon, Microsoft and Google cloud services. The company targets to be a one-stop shop for cloud security in an ever-expanding spectrum of cyber threats. Ultimately the platform will be available directly to developers.
For the initial period, the Dallas startup will target small internet-centered companies and more traditional hosting companies as they will be able to subscribe to StackPath services, similar to the way Amazon.com Inc. sells space in the cloud on a pay-as-you-go basis. Hosting providers also can sell the security services offered by StackPath and white-label platform.
The software should be especially beneficial for consumer apps that may have security flaws. However, Crosby expects a lot of resistance from the traditional firms as security has always been implemented, handled and managed, rather than automated. This traditional security model for cloud environments doesn’t seem to meet the level of scale and automation required by the big enterprises which spin up literally tens of thousands of virtual machines a day, thus that’s where StackPath’s technology comes into play after all. Crosby also anticipates that the other rivals in internet security will be consumers too as those companies may use StackPath’s APIs to offer customers protection in areas not covered by their own products.
Lance Crosby launched the startup timely as companies of all sizes are struggling with data breaches and infiltrations which does not only cause to lose customers’ trust but cost the companies millions of dollars. Therefore the industry will watch this company closely to see if it can go beyond its impressive marketing and deliver its promise to build a single security platform that covers the totality of business needs.