JMI Equity, IGC Sink $31M for Strategic Growth at WhiteHat Security

WhiteHat Security, the Santa Clara, CA-based Web security company founded in 2001 by Jeremiah Grossman, has closed on $31 million in funding from a new investor, JMI Equity, and Investor Growth Capital, an existing investor. Both firms specialize in expansion stage investments in IT companies.

In a statement today, WhiteHat says it secures the Web applications of some of the largest global brands. The company says its new customer bookings grew by more than 75 percent, year-over-year, and it has a better than 95 percent customer retention rate. The funding is intended to accelerate the sales and marketing effort behind WhiteHat’s recently launched Sentinel Mobile and Sentinel Source products, gain inroads among enterprise customers, and to expand internationally, among other things.

The deal highlights the tremendous growth in security technology for Web applications. In its announcement today, WhiteHat cites research estimating the aggregate application security market will reach $1 billion by next year, with dynamic application security testing amounting to $453 million.

WhiteHat says its recently launched Sentinel Mobile extends the company’s security technology to mobile platforms, while Sentinel Source is intended to ensure the security of Web applications from inception.

Peter Arrowsmith, a general partner at JMI Equity in San Diego, is quoted in the statement saying, “Web application vulnerabilities are rising at an alarming rate in recent years and can have a dramatic impact on a company’s business and reputation. WhiteHat’s holistic approach to security throughout the software development lifecycle—from source code through completed production application—provides an advantage that few security providers can achieve. We believe that this approach differentiates WhiteHat as a true leader in the application security space, and we are pleased to partner with the company as it continues to meet a critical market need.”

Brian Mulvey, a vice president with Investor Growth Capital in New York, joined the board at WhiteHat last year, following an $8 million investment the firm made in 2011. IGC managing director Philip Dur, who is based in Menlo Park, CA, also oversees the firm’s investment in WhiteHat.

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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