Katie Roof (Bloomberg) -- Lacework Inc. raised $525 million to expand its cloud security business in a funding round valuing it at more than $1 billion.
The investment in the San Jose, California-based startup was led by Sutter Hill Ventures and Altimeter Capital. Other investors included Coatue Management, D1 Capital Partners, Dragoneer Investment Group, Tiger Global Management and Snowflake Ventures.
Lacework provides security for cloud-based systems, helping detect threats to businesses that use Amazon Web Services, Microsoft Azure, Google Cloud Platform or Kubernetes. The company works with technology businesses such as Pure Storage Inc., Veeva Systems Inc. and Brightcove Inc.
The software company had previously raised about $74 million, according to the company.
Sutter Hill Ventures was an early Lacework investor and helped launch the business. Mike Speiser, a managing director at the venture capital firm, said Lacework has benefited from using Snowflake Inc.’s platform, which his firm also backed. He said Lacework could eventually go public, like Snowflake, which raised $3.86 billion in its IPO last year.
Speiser said he thinks Lacework stands out in the crowded landscape of security startups. “We believe Lacework has a really good shot of being the top vendor in the world,” he said.
Lacework has benefited by taking on security businesses that weren’t built for the modern era, said Chief Executive Officer Dan Hubbard.
“The incumbents took their things that weren’t designed for the cloud and called them cloud,” Hubbard said. Lacework’s products combine a suite of security offerings that make them more comprehensive than those of some competitors, he said.
Many of Lacework’s customers are cloud-based businesses that saw their growth accelerate with the shift to remote work during the coronavirus pandemic, benefiting the company, Hubbard said. He added that his own employees, however, are eager to return to the office and will work part-time from there once it’s safe to do so.