Network security startup ExtraHop jumps to $900 million exit – TechCrunch
Last year, based in Seattle Network security startup ExtraHop was booming, quickly approaching $100 million in ARR and even making noises about a possible IPO in 2021. But there won’t be an IPO, at least for now, as the company announced this morning that it had been acquired by a pair of private equity firms for $900 million.
The companies, Bain Capital Private Equity and Crosspoint Capital Partners, are buying a security solution that provides controls in a hybrid environment, which could be useful as more companies find themselves in a position where they have assets on place and others in the cloud.
The company is part of the narrower network detection and response (NDR) market. According to Jesse Rothstein, Chief Technology Officer and Co-Founder of ExtraHop, this is a technology suited to today’s threat landscape: “I will say that the North Star of ExtraHop has always remained the itself, and that has been extracting intelligence from all the network traffic in the wired data. This is where I think the network detection and response space is particularly well suited to protecting against advanced threats.” , he told TechCrunch.
The company uses analytics and machine learning to determine if threats exist and where they are coming from, regardless of how customers deploy the infrastructure. Rothstein said he envisions a world where environments have become more distributed with less defined perimeters and more porous networks.
“So the ability to have this high-quality detection and response capability using next-generation machine learning technology and behavioral analysis is very important,” he said.
Max de Groen, chief executive of Bain, said his company was drawn to the NDR space and saw ExtraHop as a key player. “As we looked at the NDR market, ExtraHop, which [ … ] spent 14 years building the product, really stood out as the best individual technology in the space,” de Groen told us.
Security remains a bubbly market with lots of growth potential. We continue to see a mix of startups and established platform players vying for position, and private equity firms often try to establish a set of services. Last week, Symphony Technology Group bought the FireEye product group for $1.2 billion, just months after snatching McAfee’s enterprise business for $4 billion as it tried to cobble together a solution comprehensive enterprise security.