Lacework Lands $525 Million

Security startup Lacework has scored $525 million in Series D funding on a valuation of more than $1 billion. And among nearly a dozen investors is the venture arm of Snowflake (SNOW), the data warehousing company whose IPO set records in 2020.

Indeed, it seems there’s an “in crowd” among cloud security and data analytics suppliers, with Snowflake the leader — and Lacework its key lieutenant. Follow these firms and you’ll quickly get the feel for the forces at work in the multi-cloud market.

Lacework was founded in 2014 by Vikram Kapoor (ex-Bromium, Oracle), Sanjay Kalra (ex-Guavus, Juniper, and now CEO of ShiftRight), and Mike Speiser (Sutter Hill Ventures). Its claim was to be a “zero-touch cloud workload security platform” capable of ingesting huge amounts of data from sources in public, private, and hybrid clouds — including cloud-based containers such as Kubernetes — and producing detailed, graphical “kill chain” analyses of threats and anomalies.

Today, claiming revenue growth of 300% worldwide in 2020 and funding close to $600 million, Lacework is poised to grow even more by expanding its channels and boosting its R&D in the U.S. and Europe.

Lacework’s Potential

Could Lacework, now a technology unicorn, maybe launch its own IPO later this year?

If Snowflake set the pattern, that seems a realistic expectation. At the time of Snowflake’s monster round of $479 million last February, the startup had grown 121% year-over-year (not even the 300% Lacework claims). Further, the two companies share common investors, including Dragoneer and the stealthy Sutter HIll Ventures, which reportedly helped Lacework integrate its solution with Snowflake. Sutter also invested in Sumo Logic (SUMO), another big data analytics IPO of 2020. Lacework and Snowflake also share a common board member, John McMahon (ex-BladeLogic, BMC), who is also on the boards of MongoDB and Cybereason.

Since both Snowflake and Lacework have been so successful, it’s interesting to check out the ecosystems forming around both of them. While endorsement can’t guarantee success, it does point to market areas where companies with traction -- and their investors -- see potential.

Besides Lacework, for example, Snowflake has invested in the following firms: DataRobot — which uses artificial intelligence (AI) for enterprise business analytics; Hunters — an XDR firm that uses AI to detect cyberthreats from endpoint to cloud; Knoema, an AI-driven data gathering company that was just bought by holding company Eldridge; and Quantifind, which uses AI to identify enterprise financial crime and risk.

The above Snowflake investments are separate from the vendor’s partner program, which contains startups such as Kount, which uses AI and machine learning to prevent online fraud for e-commerce businesses — and which hosts a private, dedicated Snowflake data warehouse as part of its solution.

Lacework has its own partner program, which includes Docker, New Relic, Datadog, Slack, and Splunk, to name just a few. Lacework also has a program called “Accelerate” to help DevOps teams add integral security to builds for Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

Lacework has other significant friends. Besides Snowflake, Hewlett Packard Enterprise (HPE) and Verizon (VZ) were early testers of Lacework’s Polygraph technology.

Common Ground in the Cloud

All the companies in the “in crowd” with Snowflake and Lacework have several elements in common, and their success points to the level of enterprise demand for these key features. One of these is the use of AI in hybrid and/or multi-cloud environments to create usable business information. Another is the integration of cybersecurity with data management. And then there is the element of the data lake model, which follows Snowflake’s lead in gathering data from multiple sources for use in cloud-based analytics.

The Snowflake and Lacework ecosystem is a group that’s growing, and it’s certainly worth watching.