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On a Friday evening in October, Greylock venture capitalist Mr. Chandna said he introduced Abnormal Security, the managing director of an email security company he had invested in, to another investor. Venky Ganesan, an investor from Menlo Ventures, who has been holding a meeting with CEO Evan Reiser for months, immediately emailed Mr. Reiser to invite him to dinner that night.
Mr. Reiser, he said, drove from San Francisco to Mr. Ganesan’s home in Atherton, California, about 30 miles. Over the weekend, Abnormal signed a deal to raise $50 million at a valuation of $600 million, raising its total funding to $74 million. Menlo’s $40 million check was the company’s largest ever investment.
“As shotgun weddings are going on, as many shotguns as you can get,” Mr. Ganesan said.
Since then, ransomware attacks have further fueled the funding wave.
In January, Lacework, a cloud security startup in San Jose, California, raised $525 million in funding. Andy Byron, the company’s chief sourcing officer, said investors were contacted by Lacework’s products that use artificial intelligence to identify threats. Lacework has raised a total of $625 million since its founding in 2015.
Mike Speiser, a venture capitalist at Sutter Hill Ventures who led Lacework’s January funding, said he had no problem getting other investors to participate.
“I called five people I thought were top investors and asked if they were interested. They were all interested and we made a deal within 48 hours.” “One hundred percent of the people I called said they wanted to participate. We could have raised over $1 billion.”
David Hatfield, who joined the company as CEO in February, has had a business boom for Lacework due to “the combination of all this ransomware and nation-state attacks and a very aggressive shift of people to the cloud.”
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