Huntress has raised $150 million in venture capital, the latest step in the Maryland cybersecurity company's quest to go public.
Ellicott City-based Huntress plans to use the capital infusion to introduce three or four new products that provide data retention services and other tools to the firm's software for small and medium-sized businesses, CEO Kyle Hanslovan said. Hanslovan views the Series D round as a key step toward eventually going public once the firm reaches even greater heights of revenue and staff count.
“All these people are coming on board because they want to take it to that next stage, not only to (going) public but afterward to continue making a difference after an IPO,” Hanslovan said in an interview with the Baltimore Business Journal.
Some of the largest names in technology are investing in the company. Silicon Valley firm Kleiner Perkins, an early investor in Amazon, Meritech Capital, a Salesforce investor, and existing Huntress investor Sapphire Ventures led the round.
“Huntress has emerged as a clear outlier in a world where [small and medium-sized businesses], the foundation of our global economy, have been chronically underserved," Sapphire Ventures Partner Casber Wang said in a statement.
The nine-figure raise comes after Huntress raised $60 million in 2023. At the time, the company was focused on protecting devices like laptops and cellphones from cyberattacks and had just started diversifying its products through acquisitions, Hanslovan said. Many companies in cybersecurity only specialize in one very specific part of the industry, like preventing cyberattacks or responding to data loss, but Hansolvan believes Huntress will evolve into a software that can solve many different problems in a single package.
"I'm finally big enough and I finally have the moment where I can see this vision I started eight years ago to the end," Hanslovan said.
The new venture round will build on that growth with more data-focused products. One product may provide a record of who logged into a certain computer system to make it easier for companies to track incidents, Hanslovan said. Cybersecurity insurance firms and large enterprise companies require smaller firms to retain this data, giving Huntress a large possible market. Hanslovan also wants to improve Huntress’s software by creating more autonomous features like automatic updates to reduce the amount of work on technical support staff within a company.
“Why are we creating work for IT people?” Hanslovan said. “Why shouldn’t it be autonomous?”
Since the firm's Series C round last year, Huntress has aggressively expanded internationally in Australia and Europe. Those markets combined with new products like identity theft protection, led the firm to add just under 100 staff since 2023 and put it on track to reach $100 million in annual revenue later this year, Hanslovan said.
Unlike many of its peers in cybersecurity, which often rely on one single large contract from the government or large business for the bulk of their revenue, Huntress focuses on volume. The average deal size for Huntress is around $10,000 a year, Hanslovan said, but the company adds between 900 and 1,200 customers a month. Key to this volume is offering software at a relatively affordable price.
“You don't need a Formula One car to protect a small business,” Hanslovan said. “You could get away with a much cheaper sports car.”
As the company pursues an IPO, Hanslovan wants to avoid following in the footsteps of other local firms that have gone public only to have their stock price quickly decline. The most recent example is fellow cyber company ZeroFox. The Baltimore firm went public with a $1.7 billion valuation two years ago, only to sell for a fraction of that price earlier this year. Hanslovan wants to wait until Huntress hits annual revenue of around $250 million before considering an IPO.
“I don't want to end up as a ZeroFox because if I fail, that means I'm letting down the 33 million medium-sized businesses in the U.S. alone that need someone like me,” Hanslovan said.
