Posted on Monday, Oct 5th 2015
The increasingly ubiquitous Internet, mobile devices, social media, and the BYOD trend are making it difficult for enterprises to control the security of the thousands of devices in their network. In the recent past, most enterprises have seen a considerable spike in the number of cyber attacks. As a result, the cyber security sector is finally getting the attention it deserves. According to Gartner, the global cyber security market is expected to grow from $67 billion in 2013 to $93 billion in 2017. Billion Dollar Unicorn Tanium is making huge inroads into this market.
Emeryville, California-based Tanium was founded in 2007 by father and son David and Orion Hindawi. Their earlier device management startup BigFix was bought in 2010 by IBM for $400 million. With some of the engineers from BigFix, they started Tanium and spent the first few years building and testing a platform that would have quick visibility and control over every endpoint, even across the largest and most complex global networks. With a Google-like search function for IT data, it helps organizations accelerate detection, investigation, remediation and ongoing enforcement of security.
While competitors such as Symantec and Intel’s McAfee division offer similar services, they require large server deployments to reach out one by one to every computer. Tanium employs a new kind of peer-to-peer system, where each computer on a network talks to the computer next to it, relaying information along a chain before sending it back to a single server. This makes it easier and faster to monitor computers for signs of an infection or push out updates.
In 2012, Tanium entered into a partnership with McAfee to start selling the platform. They split after two years and took with them the McAfee head of American sales. Its clients now include half of the 100 largest US companies by revenue, including Visa, JP Morgan Chase, Amazon, Best Buy, the US Department of Defense, and Nasdaq.
Its average contract is worth $1 million over the first three years. The company does not disclose its annual revenue, but says that bookings have grown from $2 million in 2012 to $24 million in 2013 to $74 million in 2014. They are profitable and cash flow positive, and during the second quarter, bookings rose more than 250% over the year and the number of transactions above $1m have doubled in the first half of the year. For 2015, it expects bookings to grow to over $200 million.
Tanium is also looking to expand internationally. They had landed deals worth $20 million in Tokyo in the first quarter and hope to replicate that success by signing up big customers in Australia, Great Britain and Japan.
Tanium bootstrapped initially. They first raised $90 million from Andreessen Horowitz last year at a valuation of $900 million. Since then, they have raised a total of $292 million in funding from investors Andreessen Horowitz, TPG, Institutional Venture Partners, T Rowe Price, Franklin Templeton, and Geodesic Partners. Their last round of funding was held in September 2015 when they raised $150 million at a valuation of $3.5 billion. An earlier round of funding in March 2015 valued them at $1.75 billion.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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