Although it closed a $10 million round in November, Fairfax-based cybersecurity startup Invincea has been acquired for $100 million by Oxford, UK-based end point security group Sophos. Prior to the acquisition, Invincea had raised $55.5 million over five rounds since its launch in 2009, putting the company at a $130 million valuation. Backers include Dell Ventures, Aeris Capital and John Backus's NAV Fund.
It's that valuation and the recent funding news that makes Invincea CEO Anup Ghosh's decision to exit via acquisition a bit surprising. But Ghosh told DC Inno in an interview that the high momentum made it the best time for Invincea to sell.
"I'll tell you, the best time to sell is when you're at high velocity, high momentum. The worst time to sell is when you're out of cash," Ghosh said. "The cultural fit was great, it was an all-cash transaction, which if you're an investor, you'll like, so it was the right combination of things that were compelling enough for us to do the deal."
In a press release, Sophos said it would be keeping Invincea's Fairfax office in place, and Ghosh, along with Invincea COO Norm Laudermilch, will be taking on key leadership roles in the company. In an interview, Dan Schiappa, Sophos' SVP of Enduser and Network Security Groups, said Sophos will keep growing its presences in the D.C. area through Invincea and hopes to continue hiring across all of its offices.
"There is a great talent pool here, and this is a great area to recruit talent," Schiappa said. "We're going to work feverishly together on the engineering side to bring a new product to market and continue the momentum we've already made."
Sophos and Invincea started talking several months ago about how the two could work together, Schiappa said. What excited to two the most was the culture fit of the two offices. "You have to be able to move fast and innovate with a high quality to be in cybersecurity," Schiappa said. "It was love at first sight, at least on our end."
Invincea was one of D.C. tech's hottest cyber companies, bringing in a slew of funding and a $8.1 million federally-backed cyber deal in April 2014. But Invincea joins a growing group of DC startup darlings that chose an acquisition in the past year. In November, Cvent removed itself from the stock market after it was acquired by Vista Equity Partners, and Michael Chasen's SocialRadar was sold to Verizon. Oracle also acquired both Arlington, Va.-based Opower and Vienna, Va.-based AddThis in 2016, too. What sets Invincea apart is its high growth, making this sell a surprising move.
Looking forward post-acquisition, the new Sophos plans to focus on launching new products and integrating the two companies.
"We're really going to be focusing on this integration and bringing this new product to market in the next year," Schiappa said. "The funny thing in the security space, we know that there are certain trends out there that we're all looking at—IoT, infrastructures of service security and stuff like that—but the world changes so rapidly that while you're peaking down the road, you have to make sure you're focused on a shorter term goal, as well."
Photo credit: DC Inno 2016 50 on Fire Photoshoot
