Digital Guardian Grabs $66M, Looks to Prevent Data Loss
The story of the year in Boston tech might be the growth of the cybersecurity sector. Today, an established player in data protection says it’s adding a big funding round to keep up with market demand.
Digital Guardian, based in Waltham, MA, has raised $66 million in financing from a mix of new investors—LLR Partners, Mass Mutual Ventures, and Siemens Financial Services’ venture capital unit—and previous investors, including GE Pension Trust and Fairhaven Capital Partners.
The 12-year-old company, formerly known as Verdasys, has raised about $100 million to date. It has 265 employees—up from 115 at the beginning of 2014—and should be in the low 300s by sometime next year, says CEO Ken Levine (pictured). He adds that the new money “enables us to get to profitability while keeping our growth rate high.”
Like a lot of security-tech companies, Digital Guardian’s business is booming. The company is projecting growth of 50 percent in bookings over last year, and it has signed up 200-plus new customers in 2015. (Those numbers are roughly in line with other local companies that recently raised big rounds, including Bit9 + Carbon Black and Cybereason; there have been smaller but sizeable rounds for many others this year, including Confer, CounterTack, Onapsis, and Recorded Future.) Digital Guardian also acquired Savant Protection and Code Green Networks this year.
The company differs from most others in security in that it focuses more on protecting against data loss, versus protecting endpoints (devices) or networks or detecting threats. In other words, Digital Guardian is more for limiting damage once there’s a breach. “Our sweet spot is, in spite of all those detection and prevention tools, the bad guys are still going to get in, and I have to contain what they get,” Levine says.
Digital Guardian’s software tries to stop data loss for customers in finance, government, healthcare, energy, and other markets. “We can monitor any mechanism for data to escape,” Levine says. “Wherever the data resides, I would argue you need policies that classify data, tag it, and prevent it from going where you don’t want it to go.”
But the company has also expanded to offer threat detection and endpoint protection features that its customers want. It is putting resources into addressing data protection for cloud-based systems and mobile devices, as well as developing better data analysis and presentation tools. That all speaks to a trend of security companies trying to unify their offerings and cover more of the threat detection and response chain.
Other companies in data storage and backup, such as Carbonite, DataGravity, and Datto, may have overlap in terms of providing a layer of security for data wherever it lives. But Levine says he doesn’t see much competition from those players. “We’re specifically focused on the flow of data within and outside the enterprise,” he says. But he acknowledges the role of many different security vendors. “We’re very much part of an ecosystem,” he says.
Amid the many efforts to deal with threats and malware, Levine points to a certain level of “concreteness” in what his company is going after (and ultimately trying to stop): “This document on this computer is being sent to this person,” he says.
Levine joined Digital Guardian as CEO early last year. Previously he was CEO of NitroSecurity, which was acquired by McAfee (a subsidiary of Intel) in 2011. Levine stayed at McAfee for two years as senior vice president and general manager of security management before moving to his current post.