Today, I am excited to share that we secured $188M in a new funding round, at a valuation of $1.19B (read more here). At the outset, I want to thank our employees, partners, investors and most importantly, our customers for this important milestone. The funding follows a year of unmatched innovation that led to accelerated revenue growth, installed base growth, and rapid community adoption of our open source projects. More importantly, it has become abundantly clear to us that we have an enormous opportunity ahead of us. We are in the very early stages of a journey whose purpose is simple – to help our customers confidently run modern cloud applications.
Our thesis: Secure DevOps key to protecting modern cloud apps
We were founded on the belief that the shift towards microservices-based cloud applications and DevOps methodologies have a profound impact on how you build secure, reliable software.
- Shift-left: Adoption of CI/CD methodologies requires visibility and security to be integrated into the software development and infrastructure management process rather than being bolted-on.
- Run-time: Adoption of microservices radically alters the run-time environment with thousands of containers and cloud resources, often ephemeral, that are stitched together dynamically at runtime into applications. A deep understanding of this modern run-time environment.
- Cloud security risk. Rapid public cloud adoption, accompanied by user and resource sprawl results in a large attack surface making cloud security a “top 3” priority for CISOs. Specifically, discovering and remediating insecure configurations, managing and avoiding overly permissive access to resources and data, and tracking and auditing cloud activity will require new security tooling built for the cloud.
These are the challenges we set out to address. Our goal is to enable customers to shift security left in the development lifecycle and embed comprehensive runtime visibility and protection for containers, Kubernetes and cloud infrastructure.
Our founding DNA: The future of security is open
Sysdig started as an open source project in the very beginning. Our founder, Loris Degioanni, was a co-creator of wireshark, the widely used open source network analyzer. Sysdig, the company was born when Loris created sysdig OSS to extract deep data and rich context that offered unparalleled visibility to troubleshoot and investigate runtime threats in containerized applications. The next foundational step for us was to create Falco, the first and only threat detection engine that uses the deep visibility provided by sysdig OSS and cloud activity logs to detect behavioral anomalies and policy violations.
Together, Falco and Sysdig have become the de facto standards for threat detection and response in container and cloud environments. They are also the foundation on which Sysdig was built. Our fundamental belief is that open source drives standardization, which in turn speeds innovation by leveraging contributions from the larger community. In security, open source also provides greater transparency as the underlying rules and policies are not “black boxes”.
Over the last few years, as we expanded the Sysdig Secure DevOps Platform to address use-cases such as image scanning, network segmentation, cloud security posture management (“CSPM”) and container/cloud monitoring, we remained true to our open source DNA and have leveraged and contributed to key open source projects such as Cloud Custodian, Prometheus and Anchore engine.
Our Secure DevOps platform leverages Falco, Sysdig and other open source building blocks to comprehensively address container and cloud security with enterprise workflows, scalability, curated out-of-box policies and integrations, and a SaaS delivery model.
The opportunity is already here
2020 will remain etched in our memories as the year of the global pandemic. Ironically, it is also the year that I believe will be seen as a major inflection point in the adoption of containers and Kubernetes, and the year when the voices of any remaining cloud sceptics faded away.
What has also become clear is that legacy security companies are ill equipped to address customer needs as they package disparate acquisitions into a pricing bundle, but one that leaves customers with a poor user experience.
We experienced this first hand. We saw triple-digit growth in 2HFY21. We saw our enterprise customers expand their footprint massively as the average annual spend across our top 50 customers exceeded $500K. Adoption of Falco grew 300% last year and reached 24 million downloads, underscoring the importance of container and cloud runtime security.
We were selected by customers across hundreds of engagements not just over legacy vendors but also over other security startups focused on container and cloud security. We were selected because our unmatched visibility enables better security; because we provide unified security across workloads and cloud infrastructure; because of our open source foundation; because we have dozens of proof-points of cloud-scale deployments; and because we are radically simple to operate with our SaaS deployment and curated, out-of-box policies and integrations across the software lifecycle.
Our aspiration is to build the next great security company
The last major security category that emerged ~7 years ago was the EDR (endpoint detection and response) category that created major new winners at the expense of traditional “antivirus-centric” companies. Container and cloud security is an even larger security category and our aspiration is to emerge as the market leader of that category.
We have built a strong foundation with our leadership in Secure DevOps and strong market momentum. We have built a strong organizational foundation on the strength of our three core values – love our customers; trust in the team; and dig deeper. We are passionate and fixated on our mission to enable customers to confidently run modern cloud applications. We are excited about the journey ahead.