Three weeks after Wilmington-based Locus Robotics Corp. became a so-called "unicorn," the title of "latest Massachusetts tech company to hit a $1 billion valuation" has passed into the hands of Aqua Security Software Ltd., an Israeli cybersecurity company with U.S. headquarters in Burlington.
Following the completion of a $135 million fund-raise, Aqua Security, which has more than 50 employees in Massachusetts, is expected to grow its local headcount to 65 people by the end of this year. Announced Wednesday, the Series E funding led by ION Crossover Partners puts Aqua’s valuation at over $1 billion, according to the company.
Founded in 2015 in Ramat Gan, Israel, Aqua Security allows organizations such as banks, media and insurance companies to move to the cloud by keeping them secure. The company, which raised more than $265 million to date, laid off more than two dozen workers last year, citing a projected growth trajectory that didn't materialize.
Dror Davidoff, co-founder and CEO of Aqua Security, said in an interview that cloud security is now emerging as a market category, so Aqua Security needed significant funding to scale up its business.
"We want to build a multibillion-dollar company, and hopefully in a few years be able to take it public," he said. "That's the plan."
No SPAC
Davidoff, who's based in Israel, said that the company is slated to be IPO-ready in the next two to three years, as it plans to cross $100 million in annual revenue next year. "Most of our revenue is indeed recurring revenue, but the stated goal of exceeding $100 million in 2022 is based on total recognized revenue for the year," he clarified in a follow-up email.
Davidoff is aware that deals with special purpose acquisition companies, or SPACs, are becoming increasingly popular as an alternative path to the public markets. "But the plan is to go the traditional way to IPO," he said. "We need a little bit more time to have a retrospective to understand how effective (SPACs are) over time."
In total, over 300 employees work for Aqua Security, including about 100 people in North America. The company plans to keep its Burlington office, which is now a sales, marketing and customer-service hub, even if it plans to embrace a "flexible model" for work in the future.
Davidoff noted that the $1 billion valuation is not a milestone, but more of a recognition of the value of the cloud security platform the company has built. "It's really a recognition to everything that we have achieved, but also to the potential of where we can take the company," he said.
Massachusetts tech unicorns 2020
Valuation: $1 billion
Total funding: $422 million
Unicorn date: 05/06/2018
What it does: Low-code rapid application development software
HQ: Boston
Founding year: 2001
Valuation: $1 billion
Total funding: $263 million
Unicorn date: 02/13/2020
What it does: Financial services software
HQ: Boston
Founding year: 2009
Pictured: Mike Massaro (pictured) is CEO of Flywire
Valuation: $1 billion
Total funding: $388 million
Unicorn date: 08/05/2019
What it does: Endpoint security software
HQ: Boston
Founding year: 2012
Pictured: From left, Cybereason co-founders Yonatan Striem-Amit, CTO, Lior Div, CEO and Yossi Naar, chief visionary officer
10. Valuation: $1.053 billion
Total funding: $454.5 million
Unicorn date: 01/21/2020
What it does: Security software for developers
HQ: Boston
Founding year: 2015
Pictured: Guy Podjarny (left), founder and president of Boston-based Snyk, and Peter McKay, CEO
Valuation: $1.065 billion
Total funding: $103.2 million
Unicorn date: 08/01/2018
What it does: 3D printing
HQ: Somerville
Founding year: 2011
Pictured: The Formlabs printers are called Form 2, Form Wash and Cure
Valuation: $1.13 billion
Total funding: $318 million
Unicorn date: 03/06/2014
What it does: Data management, cloud backup and recovery
HQ: Waltham
Founding year: 2009
Pictured: Ash Ashutosh, founder and CEO of Actifio
Valuation: $1.2 billion
Total funding: $245 million
Unicorn date: 04/29/2015
What it does: Enterprise data and cloud storage software
HQ: Waltham
Founding year: 2011
Valuation: $1.25 billion
Total funding: $320 million
Unicorn date: 04/01/2019
What it does: Software for corporate catering
HQ: Boston
Founding year: 2007
Pictured: Stefania Mallett, co-founder and CEO of ezCater
Valuation: $1.26 billion
Total funding: $396.5 million
Unicorn date: 07/15/2020
What it does: The e-commerce company looks for top-reviewed products on sale on Amazon.com (Nasdaq: AMZN) and buys the brands from the third-party sellers. Then, it optimizes operations, taking care of branding and search
HQ: Walpole
Founding year: 2018
Pictured: Carlos Cashman, co-CEO and co-founder of Thrasio, started the company with fellow co-CEO and co-founder Joshua Silberstein
Valuation: $1.3 billion
Total funding: $431 million
Unicorn date: 09/17/2019
What it does: Artificial intelligence-based software for enterprise data analysis
HQ: Boston
Founding year: 2012
Pictured: The "Tech development area" at the office of DataRobot
Valuation: $1.4 billion
Total funding: $897 million
Unicorn date: 07/10/2018
What it does: Restaurant software
HQ: Boston
Founding year: 2011
Pictured: From left to right: Toast co-founder and president Steve Fredette; Toast CEO Chris Comparato; Toast co-founder and president Aman Narang; Toast co-founder and chief technology officer Jonathan Grimm
Valuation: $1.4 billion
Total funding: $1 billion and $116 million
Unicorn date: 12/06/2017
What it does: The agriculture-technology startup uses microbiology research to help farmers replace chemicals and fertilizers and increase crop yield
HQ: Boston
Founding year: 2013
Pictured: An Indigo grow room in Charlestown
