Almost $10B Invested In Privacy And Security Companies In 2019

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Close to $10 billion was invested in privacy and security companies in 2019, an all-time high in the last decade up more than five-fold from $1.7 billion in 2010.

Seed and early-stage deals represent 44 percent of invested dollars ($4.4 billion) with Series C+ and larger rounds at 56 percent ($5.5 billion) of all dollars in 2019. The growth in funding year over year is attributable to Series C+ and larger rounds adding $1 billion.

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Some of the largest rounds in 2019 include:

  • KnowBe4, based in Clearwater Florida, a platform for security awareness training, raised a $300 million Series C.
  • Rubrik, based in  Palo Alto, California, a data protection and management company raised a $261 million Series E.
  • 1Password, based in Toronto, a secure password manager providing businesses a safe way to share passwords, raised $200 million in a Series A.
  • OneTrust, based out of Atlanta, Georgia, is a privacy management and marketing compliance technology that helps organizations comply with global regulations like GDPR, raised a Series A of $200 million.

Year-over-year deal counts are down by a quarter, but will lessen over time. Much of the difference in funding round counts are attributed to the seed stage–down 40 percent–where we see the most reporting delays. We fully expect these numbers to go up during 2020, but not supersede 2018 round counts of 1,100. Reporting delays for funding amounts are less pronounced in Crunchbase data.

In our analysis over the last five years we found the five top countries for privacy and security investments include the United States, China, Israel, Great Britain and Canada in that order. For 2019, Israel jumps to the second spot after the U.S.

Top Exits In 2019

There were 85 venture backed privacy and security companies acquired in 2019 exiting at $4.8 billion. The largest exits of 2019 include Shape Security, a company providing defense against malicious attacks, which was acquired by F5 Networks for $1 billion. And Recorded Future a threat intelligence firm was acquired by Insight Partners for $780 million. The most active acquirers are Palo Alto Networks with five acquisitions and Akamai Technologies with three. Cisco, Fortinet, Mastercard, Microsoft, Proofpoint and VMWare all acquired two companies in this space.

Venture-Backed IPOs In 2019

Six venture-backed companies in privacy and security went public in 2019. They include California-based CrowdStrike, Cloudflare and Fastly. Also included are Denver-based Ping Identity, Boston-based Tufin and Mumbai-based Affle.

Leading Investors In 2019

Leading investors in security companies include established venture firms Bessemer Venture Partners, Accel, Battery Ventures, LightSpeed Venture Partners, Vertex Ventures, CRV, Kleiner Perkins, Norwest Venture Partners and Scale Venture Partners. Growth-stage investors include Insight Partners, Goldman Sachs and ClearSky. Corporate investors are also active in this category with Bain Capital Ventures, Dell Technologies Capital, Intel Capital and Salesforce Ventures. TenEleven Ventures and ForgePoint Capital are uniquely placed as firms specifically focused on cyber security investments.

Crunchbase will be at RSA 2020. You can find us at “How-To For Innovators” on Feb. 24, 2020. 

Based on Crunchbase data, companies exhibiting at RSA 2020 have collectively raised $3.8 billion in 2019. 

Methodology

Analysis is based on data in Crunchbase as of Jan. 28, 2020. For this report we look at reported–not projected–data, which means that 2019 numbers will increase over time, relative to previous years.

Privacy and Security include the following categories:
Cloud Security, Corrections Facilities, Cyber Security, DRM, E-Signature, Fraud Detection, Homeland Security, Identity Management, Intrusion Detection, Law Enforcement, Network Security, Penetration Testing, Physical Security, Privacy, Security

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date of funding rounds, acquisitions, IPOs and other financial events as reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of Funding Terms

  • Seed/Angel include financings that are classified as a seed or angel, accelerator fundings and equity crowdfunding below $5 million.
  • Early-stage venture includes financings that are classified as a Series A or B, venture rounds without a designated series that are below $15 million and equity crowdfunding above $5 million unless otherwise noted.
  • Late-stage venture includes financings classified as a Series C+ and venture rounds greater than $15 million.
  • Note: Fundings denoted by Crunchbase private equity are not included in this report.

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CloudKnox raises $12 million to protect cloud infrastructure from insider risks

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CloudKnox Security, a cybersecurity startup that helps companies protect their private and public clouds from insider threats and poor security hygiene, has raised $12 million in a round of funding led by Sorenson Ventures, with participation from Dell Technologies Capital, ClearSky Security, and Foundation Capital.

The threats posed by external adversaries are well documented, thanks to countless high-profile cyberattacks, but risks from insiders — including employees and temporary contractors — are also thought to be on the rise. According to a 2018 report from the Ponemon Institute, the number of security incidents relating to careless workers grew from 10.5% to 13.4% between 2016 and 2018. Similarly, Verizon’s 2019 Data Breach Investigations report noted that 34% of all breaches in 2018 were caused by insiders — up from 28% the previous year.

Inside job

A number of high-profile “insider” breaches have been revealed in recent years, including at Tesla, which has sued former employees for stealing the carmaker’s confidential information and passing it on to third parties. Uber and Alphabet’s Waymo have also locked horns over stolen trade secrets. As these incidents highlight, insider threats aren’t just about employees inadvertently opening systems to exploits from third parties, they can also be the result of deliberate and malicious data leaks or intellectual property (IP) theft.

Founded in 2015, Sunnyvale, California-based CloudKnox sets about protecting companies by monitoring and enforcing “least privilege” policies in cloud environments. The principles behind least privilege stipulate that users only be allowed to access the information and systems they need to perform their job. Someone whose role is to enter data into a database doesn’t receive root access to a company’s systems, for example, so if their account is compromised by a malicious third party, damage is limited.

CloudKnox adopts a recently patented “activity-based access control” approach that makes it easier for enterprises to fine-tune permissions across their hybrid or cloud infrastructure. This effectively enforces restrictions for who can and can’t delete data, for example, and allows companies to introduce a “privilege-on-demand” system that grants access to certain powers for a predetermined period of time. This averts the classic security slip of granting someone system access to carry out a single task and then forgetting to revoke that access afterward.

CloudKnox also enables auto-remediation for machine-based identities (e.g. service accounts that carry out repetitive tasks automatically) so that all unused privileges can be automatically revoked on a regular basis. In the event that such accounts are compromised, damage is limited to whatever smaller subset of privileges the accounts had been granted.

Keeping tabs on who has access to which systems can be difficult, particularly in complex cloud environments spanning different platforms, with personnel coming and going and new services and machines being added to the mix. CloudKnox promises to help address insider threats (malicious or otherwise) by continuously monitoring for “over-privileged” machine and human users.

Above: CloudKnox access controls

CloudKnox had previously raised around $11 million, and with another $12 million in the bank it plans to “accelerate” its product development and and go-to-market (GTM) strategy.

“We’ve seen exceptional growth from customers and prospects looking to address the No. 1 risk in their cloud infrastructure,” said CloudKnox CEO and cofounder Balaji Parimi. “This positioned us to preemptively secure another round of funding to leverage strong market adoption and accelerate our customer expansion.”

Other companies are setting out to help clients safeguard their systems from breaches caused by insiders. French startup GitGuardian recently closed a $12 million funding round to help companies find sensitive data accidentally included in GitHub code repositories. This includes database login credentials, API keys, cryptographic keys, or anything that could be used by unauthorized third parties to access a system (e.g. a cloud or database).

More broadly, the global cloud security software market will reportedly hit nearly $36 billion by 2024, up from $28 billion in 2018. The trend of companies migrating to the cloud is creating a more fertile landscape for large-scale data breaches.

“CloudKnox’s vision is compelling: Enable security teams to proactively measure and mitigate the greatest risk from operating in the cloud,” said Home Depot’s chief information security office, Stephen Ward, who joins CloudKnox’s board. “It does so by delivering continuous detection and remediation of over-privileged identities while helping to understand and report on their cloud risk posture.”

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Equinix is acquiring bare metal cloud provider Packet

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Equinix announced today that it is acquiring bare metal cloud provider Packet, the New York City startup that had raised over $36 million on a $100 million valuation, according to PitchBook data.

Equinix has a set of data centers and co-location facilities around the world. Companies that may want to have more control over their hardware could use their services, including space, power and cooling systems, instead of running their own data centers.

Equinix is getting a unique cloud infrastructure vendor in Packet, one that can provide more customized kinds of hardware configurations than you can get from the mainstream infrastructure vendors like AWS and Azure. Company COO George Karidis described what separated his company from the pack in a September, 2018 TechCrunch article:

“We offer the most diverse hardware options,” he said. That means they could get servers equipped with Intel, ARM, AMD or with specific nVidia GPUs in whatever configurations they want. By contrast public cloud providers tend to offer a more off-the-shelf approach. It’s cheap and abundant, but you have to take what they offer, and that doesn’t always work for every customer.

In a blog post announcing the deal, company co-founder and CEO Zachary Smith had a message for his customers, who may be worried about the change in ownership. “When the transaction closes later this quarter, Packet will continue operating as before: same team, same platform, same vision,” he wrote.

He also offered the standard value story for a deal like this, saying the company could scale much faster under Equinix than it could on its own, with access to its new company’s massive resources, including 200+ data centers in 55 markets and 1,800 networks.

Sara Baack, chief product officer at Equinix, says bringing the two companies together will provide a diverse set of bare metal options for customers moving forward. “Our combined strengths will further empower companies to be everywhere they need to be, to interconnect everyone and integrate everything that matters to their business,” she said in a statement.

While the companies did not share the purchase price, they did hint that they would have more details on the transaction after it closes, which is expected in the first quarter this year.

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The future is autonomous: 5 reasons why automation will be tech’s major story in 2020

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This article wasn’t written by a robot, but it could have been. That, along with literally thousands of other uses, is why automation will be big news in 2020.

Over the course of 2019, it was nearly impossible to cover any major tech conference without discussing an innovation in robotics, artificial intelligence or a similar automation solution. Not every automated advance will be a surefire winner, but the body of evidence offers a convincing case that the field is moving rapidly and adoption will only continue to grow.

The global automation industry is expected to generate $238 billion by 2021, with sectors such as artificial intelligence predicted to double over the three-year span.

Rapid advances in AI and machine learning have propelled automation out of the research lab and into daily lives. The chances are fairly high now that customer service requests via online query or a phone call are being handled by a chatbot.

Here are five key reasons why automation will continue to be a significant story in 2020:

1. Robotic process automation

Two of the leading companies in the RPA space — UiPath Inc. and Automation Anywhere Inc. — raised a combined $858 million in 2019 alone, bringing theor total combined valuation to nearly $14 billion. Gartner Inc. has called RPA the fastest-growing software subsegment that it tracks.

What is propelling this segment of the tech market is a realization in the enterprise world that RPA really can handle mundane tasks and free up people to focus on other areas of the business. Companies are using RPA to process invoices and generate price comparisons, but the expectation is that RPA will move inexorably into medical, pharmaceuticals, and even the public sector.

“Of the 2,800-plus customers we have, I have visited hundreds of them and talked to thousands of people on the ground who use this technology, and there’s not a single one of them who would go back,” said Mihir Shukla, co-founder and chief executive officer of Automation Anywhere, during a 2019 interview with SiliconANGLE.

2. Artificial intelligence and machine learning

Venture capital funding reached nearly $10 billion in AI businesses last year, a doubling of investment from the previous period. When Microsoft Corp. surveyed senior executives, it found that 94% viewed AI as an important tool.

Is this indeed the “eternal spring” of AI, as former Google Brain leader and industry pioneer Andrew Ng speculated in an interview?

There is plenty of evidence to suggest that the field is blooming. AI-powered robots are already hard at work on manufacturing assembly lines, side-by-side with human workers. The healthcare industry is using AI to streamline drug discovery and monitor patients with virtual assistants. And 3,700 corporate earnings reports are being produced by the Associated Press per quarter without a single human reporter writing a word.

However, the focus on AI and machine learning may also shift strongly in 2020 from what the technology does to what it shouldn’t. Providing guardrails for AI was a hotly debated subject in 2019, and governments, such as the state legislature in Illinois, are becoming more active in limiting use of the technology in the workplace.

“Every product that we’re building is seeking to change a behavior,” said Charna Parkey, an applied scientist at Textio Inc., during a SiliconANGLE interview in November. “If you’ve got unmanned aerial vehicles and you’re trying to make a decision about where to drop the bomb, you need a human in the loop.”

3. Cybersecurity

The cybersecurity industry is facing a basic math problem. There are too many threats and not enough people to deal with them.

A study by the largest nonprofit group in the security industry found that there was a gap of nearly 3 million cybersecurity jobs worldwide. Meanwhile, according to a report from SelfKey, at least 5.3 billion records were exposed through data breaches in 2019 alone.

This may explain why investments in automated cybersecurity solution companies have been soaring, according to a study from Pitchbook and Dell Technologies Capital. Will this be enough to help businesses protect crucial data?

The answer is still to be determined, but enterprises are taking steps to confront the harsh reality.

In the same week this year that Pat Gelsinger, chief executive of VMware Inc., declared that the security industry had “failed its customers,” his company completed the acquisition of Carbon Black Inc., a security platform with an AI-powered data lake. And in December, Amazon.com Inc. Chief Technology Officer Werner Vogels, who frequently appeared at AWS events during the year wearing a shirt with the slogan “Encrypt Everything,” announced the release of several new automation tools for cloud security.

“We can’t just keep using brute force and throwing tools at the problem,” said Dave Vellante, chief analyst at SiliconANGLE’s sister market research firm Wikibon. “The focus really has to be on automation. So machine intelligence and analytics will definitely be part of the answer.”

4. Voice and digital assistants

It started with voice interface built into smartphones, and the technology has now shifted to the smart home thanks to the popularity of digital assistants such as Amazon Alexa and Google Home. The U.S. installed base of home smart speaker devices grew from 50 million units to 76 million over the past year.

There are signs that the coming year will see the deployment of voice technology for a variety of use cases well outside of the home. McDonald’s Corp. is testing voice-activated drive-throughs in Chicago, and Domino’s Pizza is developing a voice-recognition application to take telephone orders.

And the enterprise is headed down the voice technology road in 2020. Salesforce.com Inc. devoted much of its annual Dreamforce conference in November to the roll out of an AI-powered voice technology for the company’s business products and systems.

“This is the end of data entry and the beginning of data conversations,” Richard Socher, chief scientist at Salesforce, said during a Dreamforce conference presentation. “Voice is finally here.”

5. Autonomous cars

The year 2019 was not a promising one for the future of autonomous driving. Chief executives at Daimler AG and Ford Motor Co. conceded that deploying self-driving cars was proving to be a difficult task. The state of Arizona was sued after an Uber Inc. self-driving car killed a pedestrian in 2018.

However, there are also signs that 2020 may be a year of small yet significant steps for autonomous cars.

In December, the California Department of Motor Vehicles announced a permitting process for companies seeking to deploy small autonomous trucks for commercial use. Nvidia Inc. also launched a new set of advanced processors specifically designed for self-driving vehicles.

And Volkswagen declared its intention to put a fleet of electric self-driving cars on the road during the 2022 FIFA World Cup in Qatar.

Even the coming 2020 presidential election in the U.S. has not been insulated from the automation discussion. One recent story documented how automation is perhaps the least understood issue on the part of both candidates and voters.

“Artificial intelligence, deep learning, machine learning —  whatever you’re doing, if you don’t understand it  —  learn it,” said Mark Cuban, the tech entrepreneur and reality TV star. “Because otherwise you’re going to be a dinosaur within three years.”

Photo: Tomasz Frankowski/Unsplash

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Mastercard acquires security assessment startup, RiskRecon

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Mastercard announced today that it is acquiring RiskRecon, a Salt Lake City startup that uses publicly available data to build security assessments of organizations. The companies did not share the purchase price.

It has become increasingly important for financial services companies like Mastercard to help customers navigate cybersecurity, and RiskRecon will give customers an objective score of a company’s risk profile.

“Through a powerful combination of AI and data-driven advanced technology, RiskRecon offers an exciting opportunity to complement our existing strategy and technology to secure the cyber space,” Ajay Bhalla, president of cyber and intelligence for Mastercard, said in a statement.

RiskRecon CEO Kelly White told TechCrunch in a 2016 interview after the company’s $3 million seed round that the company looks at information that is readily available on the internet and puts it together to measure a company’s overall security risk:

RiskRecon leverages information that is available on the web from companies operating there as part of the act of doing business. “If you stand up web servers and DNS servers, these are intentionally discoverable because they are providing services on the internet. Systems reveal the software being run and version information from which you can determine security performance.”

White sees joining Mastercard as an opportunity to be a part of a larger organization and all that that entails. “By becoming part of their team, we have an opportunity to scale our solution and help companies in new industries and geographies take steps to better manage their cybersecurity risk,” he said in a statement.

RiskRecon launched in 2015 and has raised $40 million, according to Crunchbase data. Investors included Accel, Dell Technologies Capital, General Catalyst and F-Prime Capital.

It’s worth noting that the company was not alone in the space, competing with New York City-based SecurityScoreCard, which launched in 2013 and has raised over $112 million, according to Crunchbase. The last investment came in June for $50 million.

Today’s deal is subject to standard regulatory approval, but is expected to close in the first quarter in 2020.

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What Venture Capitalists (VCs) See For 2020

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With the underperformance of IPOs like Uber and Lyft as well as the epic implosion of WeWork, the venture capital market has softened a bit. But then again, this year should still be quite robust—with over $100 billion in investments across more than 10,000 deals, according to estimates from PitchBook.

So then what can we expect for 2020? Will things tighten up? And what are some of the attractive categories that VCs will target?

Here’s a look:

Ben Narasin, Venture Partner at NEA:

“In 2019, WeWork revealed the worst outcomes of lax corporate governance and the market appropriately punished them for doing so. Investors occasionally need to be flexible around terms in order to win the most exciting deals, but the growing discomfort many have felt over the last couple of years has solidified in the wake of very real negative consequences. In 2020, investors will require firmer governance and oversight structures to safeguard against negative impact and ensure these protections are mandated in their term sheets in a normal, plain vanilla manner that has been common over the history of the corporate form.”

Brian Hirsch, the Co-Founder and Managing Partner at Tribeca Venture Partners:

“The IPO market will slow down considerably but will be replaced by a surge in M&A as strategics find pricing to be more reasonable. As public equity investors have begun to shun startups without a clear path to profitability, those startups will turn to strategics for exits. When this occurs, price expectations will decline and come more in line with expectations of strategics that have struggled over the last few years to match public market tech multiples. The record amounts of cash sitting on corporate balance sheets will finally be put to work.”

Alex Niehenke, partner at Scale Venture Partners:

“We’ll see more action in public market and unicorn land: Airbnb’s IPO is hotly anticipated and won’t disappoint. But more interestingly I predict we’ll see another couple ‘surprises’ from business software focused companies like we did in 2019 with Zoom and Datadog. That is, super cash efficient, hyper growth companies operating at significant scale that garner significant public market premiums. I also believe we’ll see another big flame out, while the significance of WeWork is hard to replicate, the tide will turn on at least one hyper-burn, growth-at-all-cost company as funding sources look to reduce risk.”

Matt Murphy, managing partner at Menlo Ventures:

“The market will accelerate to a barbell strategy of firms clustering at Series A and late stage growth, the latter defined as rounds above $50M capital raised. The sweet spot of growth used to be $25-35M rounds and is now $50-100M. The rise of large global growth funds from traditional venture firms will amplify this trend. Series B and C will get harder unless metrics are near perfect.”

Tae Hea, the co-founding Managing Director of Storm Ventures and author of Survival to Thrival: Change or be Changed:

“Next year we will see an explosion of SaaS B2B startups leveraging AI to help businesses get a competitive edge in the new data economy. Amazon and Google’s biggest revenue stream is now their web service offerings, and this is because they have years of data about their customers, whether through search habits, the posts they share, the products they buy, or the music they listen to. They were the first to turn data into a competitive advantage in what is now known as the Data Economy. Depending on what a business wants to achieve—high store foot prints, more sales, increased market awareness—their data has to come from multiple sources so that more in-depth conclusions can be drawn from it. For example, you not only need to know how many people visited the store, but also at what time. Not just how many sales, but who too, and which touch points you had with your customer before they transacted with you, which adverts they were shown and where all the interactions occurred.”

Tyler Jewell, managing director at Dell Technologies Capital:

“The overwhelming interest and rapid adoption of Kubernetes as an orchestration platform has pushed microservices complexity right into the hands of developers. 2020 is the year where the developer industry settles on the best architecture for designing and building cloud-native applications–large systems of scale with state that operate on-demand and elastically. The strong interest in service mesh to simplify how microservices talk to each other is table stakes. Serverless is an approach that eliminates and hides all architecture decisions away from developers. Reactive architecture is emerging as a set of proven design principles for building stateful cloud apps. 2020 is the year where the developer standards, frameworks, and businesses around service mesh + reactive + serverless begin to coalesce to chart a path that works for all developers writing in any programming language in any cloud.”

Ramneek Gupta, Managing Director & Co-Head of Venture Investing at Citi Ventures:

“Machine learning is unique in that it gets better at making predictions and personalizing experiences as more consumer data becomes available. However, companies need to consider data privacy and security as machine learning continues to evolve.

“Machine learning at the edge, where machine learning models are purposefully designed to be run on consumer devices (as opposed to the cloud), will allow companies to create personalized experiences while adhering to strict privacy requirements because data never leaves the consumer’s devices. Personalization has continued to be a critical factor in a successful business model, and as we head into 2020, machine learning at the edge is a tool that will allow companies and customers to balance information sharing with user privacy.”

Sunil Kurkure, Managing Director at Intel Capital:

“Companies that are using technology to address legislation like the CCPA and pressing consumer privacy trends will be at the forefront of 2020.”

Michael Proman, Managing Director at Scrum Ventures:

“While the majority of venture investments have historically come out of Massachusetts, New York and California, there will be a greater emphasis from top-tier VCs on secondary startup markets (especially the Midwest— i.e., Chicago, Minneapolis, Kansas City, Madison, Detroit, Indianapolis, Nashville, etc) as operational (SG&A) costs within coastal markets continue to skyrocket.”

Arjun Chopra, partner at Floodgate:

“The promise of quantum computing is undeniable. Google recently announced it used quantum computing to identify the outputs of a random number generator–a feat it achieved in under four minutes. While the veracity of their claims have been challenged because getting a stable QC to do ‘real work’ has proven to be elusive, this feat is no mean one. If the same task was to be done by a supercomputer, it would take 10,000 years to complete! While we are still in the dark days of QC, a lot of nations have thrown their heft (and their checkbooks) into this ‘race.’ China, Japan and the US are all vying for dominance, and we should expect to continue to see more progress in this field in 2020 and beyond.”

Gen Tsuchikawa, CEO and Chief Investment Officer of the Sony Innovation Fund:

“As 2020 gears up to be “year 1” for massive roll-outs of 5G networks in US, EU and APAC, this will raise an interesting set of challenges for start-ups as 5G will require a structural overhaul of the technology stack above the wireless link alone. Similar to how the datacenter became a software battleground and spurred a whole new breed of start-ups on this new fabric (e.g. containers, DevOps), 5G opens up a nearly blank slate for start-ups to truly innovate for delivering the promises of 5G to the many connected vehicles, venues and sensors.”

Tom (@ttaulli) is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction.

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IOTech picks up $7.5 mln Series A

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Former Apple chipmakers form Nuvia to rival Intel and AMD server CPUs

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(Reuters) — Three of Apple’s former top semiconductor executives in charge of iPhone chips have founded a startup to design processors for datacenters, aiming to take on current industry leaders Intel and Advanced Micro Devices.

Nuvia was founded by Gerard Williams III, Manu Gulati, and John Bruno in early 2019 and is developing a processor code-named Phoenix. The company on Friday said it raised $53 million from Dell Technologies Capital and several Silicon Valley firms, which will help it expand from 60 employees to about 100 by the end of this year.

The company’s founders, backers, and plans have not been previously reported.

Williams left Apple this spring after more than nine years as chief architect for all Apple central processors and systems-on-a-chip. Gulati spent eight years at Apple working on mobile systems-on-a-chip, and Bruno spent five years in Apple’s platform architecture group. Gulati and Burno also worked for Alphabet’s Google before coming to Nuvia.

At Nuvia, the group’s goal is to take the lessons learned designing powerful chips for small, battery-powered devices such as iPhones and apply them to large, electricity-hungry datacenter servers. The founders aim to make a chip that is faster, more power-efficient, and more secure than existing datacenter processors, Williams told Reuters.

“We want to bring all these aspects that we have developed over time through our careers to this new market and really exploit them in this market, because it’s an area ripe for innovation and advancement,” Williams told Reuters in an interview.

Chip suppliers Qualcomm, Marvell Technology Group and Ampere Computing, a startup founded by Intel’s former president, are all also trying to take on Intel and AMD in the server market with chip technology previously used in mobile phones.

But Patrick Moorhead, an analyst at Moor Insights & Strategies, said Nuvia could prove a formidable new entrant based on its founding team’s track record. He said the team made “unprecedented” performance gains with each new generation of chips at Apple.

“I’ve been in and around semiconductor companies for 30 years. There are never any guarantees, but one thread that I’ve seen is that the most successful chip companies have rock star architects and developers,” Moorhead said.

Among Nuvia’s investors is Dell Technologies’ venture arm. Dell is one of Intel’s biggest customers. Scott Darling, president of the venture group and himself a veteran of Apple and Intel, said he could not comment on whether Dell will use Nuvia’s chips.

“The silicon industry is relentless. It pounds forward,” he told Reuters. “You have to have a world-class team to do something disruptive enough that it will prevail despite the response of competitors. At Nuvia, we think we have found one.”

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NUVIA, Founded By Former Apple & Google Chipmakers, Raises $53M Series A

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NUVIA, a new company made up of ex-Apple and Google engineers, announced this morning it has raised $53 million in a Series A round of funding.

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The nine-month-old Santa Clara-based startup’s mission is to “reimagine silicon design to deliver industry-leading performance and energy efficiency for the data center.” Or to put it more simply, Reuters noted that the company’s goal “is to make a chip that is faster, more power efficient and more secure than existing data center processors” and take on heavyweights such as Intel and AMD.

John Bruno, Manu Gulati and Gerard Williams III founded NUVIA, and combined have been granted more than 100 patents related to system engineering and silicon design. Besides Apple and Google, the chipmakers previously held engineering roles at ARM, Broadcom and AMD.

Capricorn Investment Group, Dell Technologies Capital, Mayfield and WRVI Capital co-led the round, which also included participation from Nepenthe LLC.1

“The world is creating more data than it can process as we become increasingly dependent on high-speed information access, always-on rich media experiences and ubiquitous connectivity,” said NUVIA CEO Gerard Williams III in a press release. “A step-function increase in compute performance and power efficiency is needed to feed these growing user needs. The timing couldn’t be better to create a new model for high-performance silicon design.”

Most recently, prior to co-founding NUVIA, Williams served as a senior director at Apple and Chief CPU Architect for nearly a decade. Manu was the lead SoC Architect for consumer hardware at Google, and played a role in defining the company’s silicon and product roadmap. Bruno was a system architect at Google.

Dipender Saluja, managing partner of Capricorn’s Technology Impact Fund, said in the release that NUVIA can push beyond the “conventional limitations of the semiconductor industry” with an approach to silicon design “that provides non-linear increases in performance and energy efficiency.”

Blog Roll Illustration: Li-Anne Dias

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Sumo Logic acquires JASK to fill security operations gap

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Sumo Logic, a mature security event management startup with a valuation over $1 billion, announced today that it has acquired JASK, a security operations startup that raised almost $40 million. The companies did not share the terms of the deal.

Sumo’s CEO Ramin Sayar says the combined companies give customers a complete security solution. Sumo offers what’s known in industry parlance as a security information and event management (SIEM) tool, while JASK provides a security operations center or SOC (pronounced “sock“). Both are focused on securing workloads in a cloud native environment and can work in tandem.

Sayar says that as companies shift workloads to the cloud they need to reevaluate their security tools. “The interesting thing about the market today is that the traditional enterprises are much more aggressively taking a security-first posture as they start to plan for new workloads in the cloud, let alone workloads that they are migrating. Part of that requires them to evaluate their tools, teams and, more importantly, a lot of their processes that they’ve built in and around their legacy systems as well as their SOC,” he said.

He says that combining the two organizations helps customers moving to the cloud automate a lot of their security requirements, something that’s increasingly important due to the lack of highly skilled security personnel. That means the more that software can do, the better.

“We see a lot of dysfunction in the marketplace and the whole movement towards automation really complements and supplements the gap that we have in the workforce, particularly in terms of security folks. This is what JASK has been trying to do for four-plus years, and it’s what Sumo has been trying to do for nearly 10 years in terms of using various algorithms and machine learning techniques to suppress a lot of false alerts, triage the process and help drive efficiency and more automation,” he said.

JASK CEO and co-founder Greg Martin says the shift to the cloud has also precipitated two major changes in the security space that have driven this growing need for security automation. “The perimeter is disappearing and that fundamentally changes how we have to perform cybersecurity. The second is that the footprint of threats and data are so large now that security operations is no longer a human scalable problem,” he said. Echoing Sayar, he says that requires a much higher level of automation.

JASK was founded in 2015, raising $39 million, according to Crunchbase data. Investors included Battery Ventures, Dell Technologies Capital, TenEleven Ventures and Kleiner Perkins. Its last round was a $25 million Series B led by Kleiner in June 2018.

Deepak Jeevankumar, managing director at Dell Technologies Capital, whose company was part of JASK’s Series A investment and who invests frequently in security startups, sees the two companies joining forces as a strong combination.

Sumo Logic and JASK have the same mission to disrupt today’s security industry, which suffers from legacy security tools, siloed teams and alert fatigue. Both companies are pioneers in cloud-native security and share the same maniacal customer focus. Sumo Logic is therefore a great culture and product fit for JASK to continue its journey,” Jeevankumer told TechCrunch.

Sumo has raised $345 million, according to the company. It was valued at over $1 billion in its most recent funding round last May, when it raised $110 million.

CRN first reported this deal was in the works in an article on October 22.

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