Boston’s next big winner in cybersecurity could be a company that’s not exactly new to the game. Waltham-based Digital Guardian on Wednesday announced $66 million in new funding—easily the firm’s largest round since it was founded as Verdasys in 2003. The company’s CEO also disclosed details on the growth of their business, and things are looking pretty good: Revenue is expected to grow by more than 50 percent this year and will cross $50 million, CEO Ken Levine said. And as we suggested in August, Digital Guardian is considering the possibility of going public in the near future, perhaps as soon as 2016, Levine said.
Rather than focusing on stopping cyber breaches, Digital Guardian specializes in what’s known as “data loss prevention”—which involves protecting data from being copied off of a computer, such as by a hacker who’s made it into the system or an outgoing employee that still has access.
“We’re seeing a real heightened sense of urgency on the behalf of customers to really protect their data, and to think outside of trying to prevent attacks—to think about preventing theft from an attack,” Levine said. “We’re seeing an even more rapid increase in that than originally expected.”
The growth comes as Boston’s tech industry is enjoying a boom in cybersecurity; four of the region’s last six tech IPOs have been in the security space, for instance—Rapid7 and Mimecast this year, and CyberArk and Imprivata in 2014.
“We’re seeing an even more rapid increase ... than originally expected.”
The new funding for Digital Guardian will go toward areas including hiring in product development and sales. Returning investors in the round were GE Pension Trust (advised by GE Asset Management), Fairhaven Capital Partners, Loring Wolcott & Coolidge, Special Situation Funds and Brookline Venture Partners. New investors were LLR Partners, Mass Mutual Ventures (the corporate venture capital arm of Massachusetts Mutual Life Insurance Company) and the venture unit of Siemens Financial Services. GE and LLR were the two largest investors in the round, Levine said. The company has now raised $127.5 million since its founding. Digital Guardian is not disclosing its valuation associated with the round.
The company reports it added 100 customers in 2015—bringing the firm to nearly 500 overall. The growth ha come as the firm has expanded its gaze beyond just serving large corporations (GE and Dupont are among its customers) and into working with mid-sized companies as well.
Digital Guardian has 260 employees currently, up from 220 just four months ago when I last spoke with Levine. The firm expects to cross 300 employees in 2016, Levine said.
The company has also achieved the growth and new funding following a major turnaround from its Verdasys days—when the company had been seeing flat growth even as the cybersecurity industry was surging, Levine said previously. Levine, previously a McAfee executive, joined in early 2014 and since then has focused on dramatically simplifying its data loss prevention product while also rounding it out with other types of security, including protection against malware.
We recently featured Digital Guardian as one of our 16 Boston tech companies to watch in 2016.
