An Ellicott City cybersecurity firm has raised $60 million, the largest round in Greater Baltimore so far this year, as it looks to fuel international expansion.
Huntress plans to use the Series C round to enhance its cybersecurity software and expand its customer base of small businesses to include larger middle-market businesses with around 2,000 employees. The round was led by Menlo Park, California-based Sapphire Ventures with participation from existing investors JMI Equity, based in Baltimore, and Forgepoint Capital, based in San Mateo, California. As part of the raise, Sapphire Partner Casber Wang will join the Huntress board of directors while Mahau Ma, operating partner at Sapphire, will serve as a board observer.
Huntress will use the money to fund international growth in Australia, New Zealand and the United Kingdom. The company launched its Australia and New Zealand branches in early April of this year. CEO Kyle Hanslovan is initially targeting English-speaking countries because there is no language barrier between those English-speaking countries and Huntress's experts.
"We have this awesome cadre of experts but they're not able to write in Spanish," Halvorsan said. "We'd love to go after Latin America, and we think that our product is a good fit for both Latin America and India, but we don't quite have that regionalization there. We're crawling before we walk."
The threats that cybersecurity companies need to plan for have changed over the past several years, Hanslovan said. The bread and butter of Huntress's business, protecting laptops and servers, is still important, but more and more cybercriminals are targeting cloud computing infrastructure to steal data. Even large companies can get hacked by relative novices who target cloud computing. Microsoft lost a variety of information to hacking group Lapsus$ led by a teenager in Britain last year, an example of how even companies with technical expertise can fall prey to cybercrime.
On the back of this ongoing need, Huntress has grown massively amid the Covid-19 pandemic, going from 25,000 customers in 2021 to over 105,000 in 2023. The cybersecurity firm looks to specifically serve smaller businesses, with its own technology platform and a team of analysts who are on call 24/7 to respond to cyberattacks.
The company earned just over $40 million in revenue in 2022 and currently has around 282 staff members, up from 214 employees in 2022. In a tough economic environment, most customers are not cutting their budget for cybersecurity. Huntress's main customers are small to mid-sized businesses in manufacturing and health care. County and regional school systems are also a growing customer base for Huntress as more schools are dealing with cyber attacks like the 2020 hacking of Baltimore County Public Schools.
The company is looking to make more acquisitions to take advantage of the low valuations and lack of venture capital funding for startups, Hanslovan said. The company acquired Atlanta education platform Curricula for $22 million in 2022 and a portion of cybersecurity company Level Effect in 2021.
"Most companies can't get funding right now. This has kind of given us that opportunity to seize that opportunity and acquire some of those good companies that don't have the revenue or the growth needed to get funding," Hanslovan said.
Huntress has been one of the major recipients of venture capital in the Baltimore region over the past three years. The company previously raised an $18 million Series A investment round led by Forgepoint Capital in February 2020 and a $40 million Series B investment round led by JMI in May 2021.
