EiQ Networks Nets $9.5M for Mid-Market Security Software
In a town full of cybersecurity companies, EiQ Networks has stayed pretty quiet for years. Now it’s making a bit of noise as it ramps up its security software for a targeted customer base.
EiQ has just raised a $9.55 million Series C funding round led by Arrowroot Capital. Founders Vijay Basani and Jay Reddy also contributed to the round. The new money brings the company’s total raised to almost $30 million. EiQ’s previous investors include VC firm Venrock.
The company’s software is designed to protect businesses’ IT systems against cyber threats by assessing vulnerabilities, monitoring and detecting anomalies in network activity, and analyzing what happens when there’s an incident.
Like a lot of security-tech companies, EiQ is coming off a strong year. It says it had 178 percent revenue growth in 2015 over the previous year. Basani, the company’s CEO, says EiQ was profitable for about eight quarters until about a year ago, when it began to focus more on growth.
“Unlike many companies, I have a clear path to profitability,” he says.
It has been a long road for EiQ. The company got started back in 2002 and focused on selling software to big enterprise companies and government organizations. About two years ago, it shifted its strategy to providing software for mid-market customers such as regional banks, credit unions, healthcare organizations, and universities. It has grown to 150 employees spread across offices in downtown Boston, Vancouver, and India.
EiQ says it is has just under 50 employees in Boston and is looking to hire 25 to 30 more local workers in 2016, with a total of 50 to 75 new hires across the company.
Basani previously co-founded AppIQ, a storage tech company that was acquired by Hewlett-Packard in 2005, and WebManage Technologies, which was bought by Network Appliance in 2000.
Other companies in EiQ’s corner of the security market include SecureWorks (part of Dell) and Alert Logic. Basani says his firm doesn’t compete much with Rapid7 or Bit9, a pair of Boston-area stalwarts in cybersecurity.
What differentiates EiQ, he says, is its focus on mid-market customers that have budget and staffing constraints when it comes to security. “Throwing technology at them doesn’t solve the problem,” he says. “We bring in the technology, but we augment it with people and process.” He adds that all services are provided remotely, not performed on-site, which tends to make it more affordable. (EiQ’s customers typically have between 50 and 5,000 employees, he says.)
Asked what he expects to see this year, Basani says big companies such as Target and other large retailers are driving more security awareness among their smaller partners—because vulnerabilities are popping up throughout the supply chain. “They need all their vendors downstream to be compliant,” he says. “A year and a half or two years ago, they didn’t really care about this. Now they need to hold their suppliers accountable.”