Fugue Inc. founder and former CEO Josh Stella is back as chief executive of the company, the Frederick, Maryland-based cloud security and compliance firm announced Monday.
Stella, who had been serving as chief technology officer, replaces outgoing CEO Phillip Merrick, who took over in July 2018 from Stella himself. At the time the goal was to grow Fugue into something much larger, which Merrick had done as CEO of Columbia, Maryland-based SparkPost and as a co-founder and CEO of webMethods, which had among the best first-day IPOs in tech history when it debuted in 2000.
Joining Stella in Fugue's C-suite is longtime tech executive David Mitchell, who is coming on as president and chief operating officer. Mitchell was previously chief revenue officer at LeaseAccelerator, and serves as a senior executive at Appian Corp. and a number of other tech companies. He also succeeded Merrick as CEO of webMethods, leading the company to its $547 million sale to SoftwareAG in 2007.
Fugue helps customers eliminate risks from poorly configured cloud settings and helps secure software development in the cloud at each stage of development, and also provides automated continuous cloud compliance.
Stella said the company under Merrick developed class-leading gross margins, a high customer satisfaction score and excellent customer retention as Merrick transformed what Stella described as a technology development company into a software business. But the goal now is driving revenue, Stella added.
“We really have built an awesome product. Our customers absolutely love the product we are giving them and the service we are offering. 2021 is all about adding a lot more customers,” Stella said.
While he declined to disclose the company’s revenue, he added it was in the seven figures. The company pivoted hard in the early part of 2019, cutting its number of products down to one, Stella said. That also meant the workforce was reduced from 70 to about 40.
When Covid-19 began to spread across the country, Fugue applied for, and received, a forgivable Small Business Administration Paycheck Protection Program loan of under $1 million.
“Our position was, and we were right, that we should keep the whole team together and not panic,” Stella said, adding there was strong concern about Covid’s impact on the company’s ability to grow revenue. The PPP loan "helped us keep the whole team together and the value at Fugue is the team,” he added.
The company also announced in November a partnership with Fulton, Maryland-based open-source security tools provider Sonatype, in which Fugue technology will be embedded into Sonatype products. The company is working on additional partnerships that Stella said would be announced in 2021.
The company also intends to raise a new funding round next year as well.
Mitchell said in a statement he was drawn to Fugue because of its approach to cloud security challenges.
“Fugue’s world-class team has demonstrated a remarkable pace of software innovation and is delighting customers with a product that is transforming how they do cloud security so they can move faster and be more competitive. I’m excited to help lead the company through its next phase of growth,” Mitchell said in a press release.
Fugue, founded in 2012, has raised $75 million in funding, most recently a $41 million round in early 2017, much of it from Chevy Chase venture juggernaut New Enterprise Associates.
