Cloud + Security Transformation = $1B+ (and growing) Valuation for Netskope
Earlier this year, I wrote about how Netskope was changing the security landscape by building the definitive security cloud for the enterprise. By architecting, from the ground-up, a globally distributed, highly scalable security platform built-for all cloud workloads, Netskope was well positioned to deliver the world’s most comprehensive Security Cloud.
We have been proud partners with the Netskope team from their earliest days and we have had a front-row seat to their execution in a rapidly evolving market. The company is scaling rapidly and is emerging as the leader in Cloud Security, so we are excited to continue our deep partnership with the team.
Today, we are proud to announce that we are further deepening our partnership with the Netskope team by leading their $168M Series F financing.
Here’s why we are so bullish on Netskope…
The company has come an incredibly long way from when we first started chatting with Sanjay Beri (founder and CEO), and his co-founders Ravi Ithal, Krishna Narayanaswamy and Lebin Cheng, back in 2012.
Back in 2012, the jury was still out on whether the Cloud was the real deal. At the time, Salesforce.com was a $22B (market capitalization) company. Amazon AWS revenues were around $1B, and Workday (WDAY) and ServiceNow (SNOW) had just gone public. Even though it was early in the cloud story, we strongly agreed with Sanjay and his co-founders that the emergence of the digital enterprise was inevitable and would therefore require a cloud-first security paradigm. And so in early 2013, we pre-empted Netskope’s Series B financing and partnered with the Netskope team… only 5 months after they had raised their Series A.
Six years later, it’s abundantly clear that enterprises are massively embracing the cloud. The cloud is one of the biggest drivers of change in the enterprise application and IT stack. Salesforce is now worth over $100B, with $13B in revenues, growing 25% yearly. Workday and ServiceNow are each worth over $30B, and Amazon AWS will power a large amount of enterprise workloads and rake in ~$25B in revenues this year.
We believe we are still in the early innings of this transformation and that the cloud wave is still building. The market speaks. Just earlier this week, SAP paid $8B for Qualtrics, a cloud-analytics company, on the eve of its IPO. And a few weeks ago, IBM finally acknowledged their need for cloud relevance by paying $34B for RedHat. And this is all on top of recent IPOs of other cloud companies like Okta, zScaler and Docusign.
One of the truisms about enterprise software is that as applications go, so does enterprise security. Therefore, as enterprises transform their businesses for a cloud-first world, they are also looking to secure their businesses with a cloud-first paradigm. Digital Transformation without Security Transformation is impossible. So it’s no surprise that 25% of the Fortune 100 has adopted the Netskope Security Cloud as their preferred security on-ramp to the cloud. And Gartner recognized Netskope as a leader in the Cloud Access Security Broker magic Quadrant.
The Netskope Security Cloud is a comprehensive platform that delivers real-time granular protection for data, people, and devices across all types of clouds (SaaS, IaaS, web). This cloud was built from the ground up with a view towards delivering best-of-class functionality in an integrated and seamless service.
The past six years of partnership with the Netskope team have been fun. From pre-empting the Series B financing in 2013, to participating in the Series C / D financings and then co-leading — with our friends at Accel — the $100M Series E financing in 2017, we are proud of our deep partnership with Netskopethrough their journey.
Today’s $168M Series F financing is another milestone to celebrate (along with achieving tech unicorn status), but we are just getting started. At six years old, Netskope is still a young company, but is building the right foundation towards its goal of becoming an independent, iconic cloud-first security company. Onwards!
Arif Janmohamed is a Partner at Lightspeed Venture Partners. He focuses on investments in enterprise IT and infrastructure and sits on the boards of a number of rapidly scaling companies, including Netskope, Qubole, Mist, Split,TripActions, and OverOps. In his free time, Arif plays ice hockey with his wife, who yells at him for never passing the puck to her.
Lightspeed is an early stage VC firm focused on accelerating disruptive innovations and trends in the enterprise and consumer sectors. Lightspeed has backed 350+ companies globally in the past two decades including Nutanix, AppDynamics, MuleSoft, Snap and Nest.
