A Sarasota-based cybersecurity company has closed a $20 million funding round after raising more than $3 million last year.
Nucleus Security is a B2B SaaS company launched in 2018 with a specific focus on vulnerability management.
“Cyber is a huge space, but vulnerability management within cyber hasn’t changed,” said Steve Carter, Nucleus Security’s CEO and co-founder. “We’re changing the way it’s done to automate the processes and workflows that, until now, couldn’t be automated. It enables agencies to respond to vulnerabilities faster than attackers can exploit them.”
The company was bootstrapped until it closed its $3.4 million Series A in February 2021, led by Minneapolis-based Arthur Ventures. It was primarily used for hiring.
The latest funding was led by Lead Edge Capital, with participation from Arthur Ventures. It will be used mainly on research and development and people and culture areas.
New York-based Lead Edge Capital stood out among the dozens of other investors Carter spoke to, he said, because of its 500-plus person investor base ranging across industries.
“You have these active resources to open doors and hundreds of large companies,” he said. “That was the differentiator.”
Until its first funding, Nucleus’ growth was steady, albeit slower-paced. Many local cybersecurity companies saw growth during the Covid-19 pandemic due to employers wanting to better secure information as employees began working from home. But Nucleus saw a bit more challenge.
“Covid might have hurt us more than helped,” Carter said. “The biggest challenge we have right now is recruiting. We’re competing with Silicon Valley and their offered salaries, who are now saying, ‘You can work from Sarasota.’ So, we’ve been crippled by Covid but had growth regardless.”
The latest funding is a sizable round for the Tampa Bay region, specifically the Sarasota area, which historically has lagged in technology startups.
“The reality is, it’s not a hub for technology; I’ve started local tech groups, but it is a struggle to get folks excited about Sarasota,” he said. “I won’t lie and say I have this grand vision of a tech hub. But the people who are there love it and aren’t willing to move to the Valley. So, it’s more, ‘How can we help the people who love this place and love technology, and keep them here?’”
Carter acknowledges Nucleus is an under-the-radar company and attributes it partially to having no Florida clients in its roster. Instead, he has an international focus and counts Toyota, Qantas Airline and National Australia Bank among his clients.
“We’ve never met any of our customers — it’s all done online,” he said. “It wasn’t, ‘We’re targeting local businesses,’ because the product we’re making is for really large businesses and big government agencies.”
The company has 48 employees, aiming to hit roughly 75 by the end of the year. Carter has no plans to pursue a Series C in the near future and hopes profitability will come from securing large contracts with its latest expansion into the defense sector.
“We’re keeping all options on the table, but we don’t have a timeline — we’re not in a hurry, and this is a long game,” he said. “We’re super passionate about this space. I feel like we have a ton of work to do in the product and market, so we want to keep doing it and keep all options as we go.”
