Columbia cybersecurity firm Tenable is launching its first venture capital arm to support early-stage startups.
The public company is planning to earmark up to $25 million for the Tenable Ventures fund. Tenable (NASDAQ: TENB) began investing in startups back in 2021, said Matt Olton, Tenable's senior vice president, of strategy and corporate development, but didn’t go public with the fund until late January of this year.
The Tenable fund is a new influx of cash into a technology industry that is struggling to get capital. Though the market is difficult, Olton believes Tenable is mature enough after over 20 years in business to foster a network of portfolio companies.
Tenable is looking for startups that can add to the company's cybersecurity offerings. Tenable wants to create a wider ecosystem of companies to give customers more options. The company focuses on trying to identify weaknesses in a business's network, like software that was incorrectly installed, to prevent cybercrime before it happens.
"We want them to become part of this exposure management ecosystem," Olton said. "Whether in the future that results in partnering with Tenable, further investment or acquisition, who knows? But right now, our focus is on building out this ecosystem, because we really think customers will benefit."
Typical investments will likely range from $500,000 to four or five million dollars.
Companies that Tenable invests in get access to executives who are entirely focused on the cybersecurity industry, Olton explained. Tenable has already invested in three companies, Israeli identity threat detection firm Authomize and California companies Araali Networks and Lineaje. Many companies that have great technology may struggle with reaching consumers Olton said, or if they have a strong strategy to enter the market the technology might need slight improvements. Tenable can work closely with startups to improve both aspects of a business, Olton said.
Cybersecurity giant has active research and development sectors along with a history of large acquisitions, but hadn’t looked much at the potential of working with startups that can add new cloud or identity threat prevention tools to Tenable's services, Olton said.
Tenable has expanded through several mergers and acquisition deals over the past several years, including the purchase of BitDiscovery for $44.5 million in 2022, and a California company for $160 million in 2021.
Outside of the United States, Tenable is going to target Israel as a hotbed for startups. Many Israeli cyber companies come out of the country’s robust university system and the Israeli Defense Forces, Olton said.
