On Wednesday, private equity and alternative assets investor KKR, which manages $349 billion in client assets across various strategies, announced that it has led a $90 million growth equity round in Minneapolis cyber defense firm NetSPI, which develops penetration testing for enterprise clients across multiple industries. Ten Eleven Ventures, a Silicon Valley venture capital firm that has raised $500 million (to date) and invested solely in cybersecurity firms, also participated in the round. NetSPI will use the funds to expand its cybersecurity team, invest in product innovation, and deepen its operations across U.S. and global markets.
KKR is investing in NetSPI through its Next Generation Technology Growth Fund II. Together with Ten Eleven Ventures, KKR has previously invested in a number of cybersecurity companies including Cambridge-based, AI-driven cybersecurity firm Darktrace and threat detection firm ReliaQuest.
After spending its first several years as a bootstrapped (yet profitable) business, NetSPI joined forces in 2017 with technology private equity firm Sunstone Partners, which has been instrumental to the company’s growth post-investment. Gus Alberelli, Managing Director of Sunstone Partners, said: “We’re incredibly fortunate to partner with NetSPI’s team and proud of the company’s extraordinary growth stemming from its technology-enabled penetration testing team. We are excited for KKR and Ten Eleven Ventures to join Sunstone Partners in supporting NetSPI’s growth journey.”
Cybersecurity-of-cybersecurity
Also on Wednesday, enterprise cybersecurity firm Panaseer, the UK-US domiciled company that has developed Continuous Controls Monitoring–essentially cybersecurity monitoring of enterprise cybersecurity security itself–announced that it has raised $26.5 million in Series B funds. The round was led by early-stage venture capital investor AllegisCyber Capital with participation from existing investors, including Evolution Equity Partners, Notion Capital, AlbionVC, Cisco Investments and Paladin Capital Group, as well as new investor, National Grid Partners. Panaseer’s total funding to date is now $43m.
“”The emergence of Continuous Controls Monitoring as a new cybersecurity category demonstrates a ‘coming of age’ for cybersecurity,” said Bob Ackerman, Founder and Managing Director of AllegisCyber Capital as well as Delaware-based cybersecurity startup firm DataTribe. “Cyber is the existential threat to the global digital economy. All levels of the enterprise, from the CISO, to Chief Risk Officer, to the Board of Directors are demanding comprehensive visibility, transparency and hard metrics to assess cyber situational awareness. Panaseer has demonstrated itself as the leader in this critical new category and we are excited to be working with the team to further advance its leadership role in this essential market.”
“Existing cybersecurity tools tend to be proprietary and fragmented, so CCM is emerging as a new category to automatically ensure all those tools are operational and to identify gaps,” said Ian Cooper, Head of CVC Europe for National Grid Partners.
“Most enterprises have the tools and capability to theoretically prevent a breach from occurring,” said Panaseer CEO Jonathan Gill. However, one of the key reasons that breaches occur is that there is no technology to monitor and react to failed controls. CCM continuously validates and measures levels of protection and provides notifications of failures. Ultimately, CCM enables these failures to be fixed before they become security incidents, saving time, cost, and allowing businesses to go faster. Our investors are providing further validation of the market, so we can enable more enterprises to evolve their cybersecurity at the speed of their business.”
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