Funding follows accelerating growth and open source community momentum, and positions Sysdig to emerge as the leader in container and cloud security
Sysdig, Inc., the secure DevOps leader, today announced a $188 million Series F funding round at a valuation of $1.19 billion. This round brings Sysdig’s total funding to $394 million since inception. The financing was led by Premji Invest & Associates and Third Point Ventures, with participation from Accel, Bain Capital Ventures, DFJ Growth, Glynn Capital, Goldman Sachs, Insight Partners, and Next47. The company also announced that Robert Schwartz from Third Point Ventures, Sandesh Patnam from Premji Invest & Associates, and Enrique Salem from Bain Capital Ventures have joined its board of directors.
Blog from CEO Suresh Vasudevan: Our $188M funding round fuels our mission to help customers confidently run modern cloud applications
The Sysdig Secure DevOps Platform uniquely addresses the challenges of securing containers, Kubernetes, and public cloud infrastructure. Sysdig is trusted by hundreds of leading enterprises, including Worldpay by FIS, Yahoo Japan, IBM, and JW Player to confidently run modern cloud applications while managing security risks and meeting compliance requirements.
This round follows strong growth in 2020, a rapidly expanding customer base, a thriving open source community, and a massive growth opportunity with containers and cloud.
Key Milestones:
- New annual contract value (ACV) added during the second half of the 2021 fiscal year (FY21) was 2.3 times the amount added in the same period, the previous fiscal year,* reflecting increasing cloud adoption and momentum throughout 2020.
- 450 enterprise customers, including dozens of large global enterprises, with an average annual recurring revenue (ARR) of more than $500,000 across the top 50 purchasing customers.
- Strong pattern of expansion by customers as demonstrated by an annual net revenue retention (NRR) of 140% at the end of FY21.
- With nearly 24 million downloads, including 1.7 million in the last month, Falco adoption has increased 300% in the last year.
- Sysdig significantly expanded the total addressable market (TAM) beyond container and Kubernetes security to include cloud security with the addition of continuous cloud security posture management (CSPM) in 2021. The served addressable market (SAM) also increased with the delivery of more than 50 significant features last year, including the first inline scanning for Fargate, zero trust network security, and cloud-scale Prometheus monitoring.
*The 2021 fiscal year ran from February 2020 – January 2021.
In November 2020, Gartner increased its 2021 public cloud forecast to total $304.9 billion, up from $257.5 billion in 2020. [1] Modern applications are increasingly built as highly distributed microservices, leveraging containers and Kubernetes, and a vast array of services on public cloud platforms. While this shift accelerates innovation, it presents unique challenges that legacy security tools, built with a proprietary, firewall mindset, are unable to address. To manage risk without slowing down application delivery, companies need a security stack:
- Architected for secure DevOps.
- Built on open source to accelerate innovation and drive standardization.
- Delivered as SaaS for simplicity and scale.
- That provides deep visibility across containers and cloud.
Run Containers, Kubernetes, and Cloud Applications Confidently with Secure DevOps
The Sysdig Secure DevOps Platform provides security and visibility to confidently run containers, Kubernetes, and cloud. Customers rely on the platform to secure the software build pipeline, detect and respond to runtime threats, monitor service health, and continuously validate cloud security posture and compliance.
Sysdig’s SaaS deployment model and curated, out-of-the-box workflows enable companies to reduce security risk while also improving operational efficiency by 25-50 percent. With functionality that spans cloud security posture, cloud workload protection platform, and container monitoring markets, 85 percent of new customers purchase the platform solution, replacing three point solutions.
Sysdig was founded as an open source company and the Sysdig Secure DevOps Platform was built on an open source foundation to address the security challenges of modern cloud applications. Open source sysdig and Falco are projects that were created by Sysdig to leverage deep visibility as a foundation for security, and they have become standards for container and cloud threat detection and incident response. Falco, which was contributed to the Cloud Native Computing Foundation (CNCF) in 2018, is now an incubating-hosted level project. Last year, Sysdig announced full compatibility and scalability for Prometheus, the CNCF project second in popularity to Kubernetes. Sysdig’s CSPM capability incorporates the popular Cloud Custodian, a CNCF project for static configuration checks.
Focus of this Investment
This new round of investment will enable Sysdig to invest in continued innovation in its open source foundation as well as in its secure DevOps platform, and grow research and development teams in Raleigh, Spain, Italy, Belgrade, and San Francisco. The funding will drive expansion of sales and marketing in existing markets within the United States, Europe, Japan, and Australia, as well as entry into newer markets in the Asia-Pacific region. A key emphasis will be on continuing to build ecosystem and channel partnerships and local SaaS regions around the globe.
Quotes
Enrique Salem, Partner, Bain Capital Ventures: “The current security stack based on a firewall mentality and promoted by incumbents is irrelevant in the cloud. Sysdig takes a secure DevOps approach, allowing teams to ship cloud apps faster while managing security risk. They built on an open source security stack, which we see accelerates innovation and adoption.”
Sandesh Patnam, US Managing Partner, Premji Invest & Associates: “The cloud is driving a transformative shift in the way applications are developed and secured. This levels the playing field for young, innovative companies to emerge as leaders in this new, exciting category. We are extremely deliberate in our investments and expect Sysdig will not only have a successful IPO, but deliver strong long-term returns in the public market.”
Robert Schwartz, Managing Partner, Third Point Ventures: “Sysdig took several steps early on that differentiated it from other solutions, including taking an open source approach to container and Kubernetes security well before others jumped on the bandwagon. This has paid off tremendously for them. Sysdig has a marquee customer base and proven its ability to scale. We’re excited to be joining the Sysdig team and can’t wait to help them accelerate from here.”
Ping Li, Partner, Accel: “Accel partnered with Sysdig early on, with a belief that a DevSecOps stack, based on open source, deployed as SaaS is a winning formula. Today, they are the clear leader in runtime security for containers and cloud.”
Suresh Vasudevan, Chief Executive Officer, Sysdig: “Sysdig was founded as an open source company and architected for secure DevOps. In contrast, Palo Alto was founded as a proprietary firewall company, and that mindset slows app delivery in the cloud. The leading security stack for cloud delivered apps will be built on open source with a secure DevOps approach that delivers deep visibility into containers and cloud.”
[1] Gartner, Gartner Forecasts Worldwide Public Cloud End-User Spending to Grow 18% in 2021, Katie Costello and Meghan Rimol, 17 November 2020
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