Software provider Graylog closes $39M funding round amid growth year

Houston-based software company Graylog has secured additional funding as new bookings for its cybersecurity offerings have grown this year.

The company said Oct. 31 it raised $39 million. The round was led by California-based Silver Lake Waterman — a new investor — and returning investors Piper Sandler Merchant Banking and Harbert Growth Partners. Graylog CEO Andy Grolnick told Houston Inno that the company had raised $67.5 million in a combination of equity and debt to date.

The company said the money would be used to accelerate product development and differentiation, scale global go-to-market operations, and bridge the gap to profitability. Additional artificial intelligence and machine learning capabilities are expected to be used to improve some of Graylog's security platforms, Grolnick said in response to Houston Inno questions.

"We plan on leveraging the funding to accelerate development and differentiation primarily for our Graylog SIEM and Graylog API Security platforms," Grolnick said. "Areas of enhancement will focus on more advanced threat detection and response capabilities, improving customer experience and lowering the total cost of ownership for customers."

Grolnick also confirmed that the company would add 15% more employees worldwide in the next six months. Graylog has 110 employees worldwide, and the company expanded its downtown Houston headquarters at 1301 Fannin St. earlier this year.

The new funding announcement follows Graylog raising nearly $9 million in equity funding earlier this month, according to a Form D filed with the Securities and Exchange Commission. The company previously raised $18 million in 2021 for expanding its teams in Houston and Europe.

Graylog has seen a 67% year-over-year increase in bookings for its cybersecurity services, which was one factor the company attributed to its growth. Other factors include the acquisition of Resurface.io’s security platform in July. Graylog is also listed on Amazon Web Services’ marketplace, and the company plans to add more listings next year.

"With a focus on profitable growth, it’s all about making smart growth investments in product development, sales, marketing and customer success while keeping overall spending growth well below revenue growth," Grolnick told Houston Inno.

Graylog, which was founded in Hamburg, Germany, moved to the U.S. in 2015. Last year, founder Lennart Koopmann stepped into a new role as chief product officer, allowing Graylog to hire software-as-a-service veteran Robert Rea as chief technology officer.

Graylog also opened a London office in 2021. Last year, the company was named a Houston Inno Fire Awards honoree in the technology and software category.

In Q3 2023, Houston saw the least amount of venture capital deals since Q3 2020 — but the cumulative value of those deals was the largest since Q3 2022. Houston’s venture capital activity was led by Houston-based Axiom Space's $350 million Series C funding round in August. The raise was the largest in Texas in the third quarter.

Other top local deals in the third quarter included $40 million in late-stage funding for Houston-based clean technologies company Cemvita Corp. and $20 million in late-stage funding for electronics manufacturing company MacroFab. Cemvita recently secured a sustainable aviation fuel deal with Chicago-based United Airlines (NYSE: UAL), which is one of Houston’s busiest airlines. Meanwhile, MacroFab also closed a $42 million Series C funding round in the first quarter of 2023, which was the top local deal in that quarter.