A new $325 million USD ($414 million CAD) financing deal close to closing will soon give cybersecurity company eSentire a $1.1 billion USD valuation.
The Waterloo-based tech company officially announced the deal today. According to a spokesperson for eSentire, the deal is in the final stages of legal and is expected to close the first week of March.
The investment comes via a major purchase of eSentire shares by Georgian and Caisse de dépot et placement du Québec (CDPQ).
The deal was first reported by Bloomberg and The Globe and Mail, which stated that the pair of investors bought the majority of the $414 million stake from Warburg Pincus, a long-time investor in eSentire.
eSentire confirmed to BetaKit that Georgian and CDPQ are buying shares from Warburg Pincus, and once the deal closes the pair will collectively own 35 percent of eSentire. Warburg Pincus remains eSentire’s majority shareholder, though its stake will go from around three quarters to just more than 50 percent. Employees holding options were also given the chance to liquidate a portion of their shares as part of the deal.
Around $100 million USD of primary capital will go into eSentire’s coffers, bringing the company’s funding raised to date over the last four years to $382 million USD.
Georgian’s part in the investment increases the venture firm’s existing stake in eSentire. The firm has also been a long-time investor in the company, having first bought a stake in 2014 and then in 2016 led a $27 million round alongside Edison Partners. CDPQ joins as a first-time investor in eSentire.
The financing comes as eSentire has surpassed $100 million USD in annual recurring revenue (ARR), and has its sights set on building a bigger presence in Europe and the Asia-Pacific (APAC).
“eSentire has established itself as the leading provider of Managed Detection and Response cybersecurity services, protecting the reputations and operations of more than 1200 organizations in over 75 countries from business disruption, with a Mean Time to Contain (MTTC) active cybersecurity threats of less than 15 minutes,” said eSentire CEO Kerry Bailey in a statement shared with BetaKit.
Founded in 2001, protects companies from cyber threats. Its tech automates threat detection, providing security analysts with visibility into network, cloud, endpoints, hybrid, and on-premises environments.
eSentire’s platform is used by more than 1,200 organizations in more than 75 countries. The more than 540-person team has been recognized as a leader in the Managed Detection and Response space. That being the case, it also faces major competition from the likes of Arctic Wolf Networks, which has a major presence in Kitchener-Waterloo; and Mandiant (formerly FireEye), which is reportedly in talks with Microsoft over an acquisition deal.
“We provide the world’s strongest capabilities in terms of Managed Detection and Response,” said eSentire CMO Erin McLean in an interview with BetaKit. “We are going hand in hand against threat actors every single day, and our team is so mission-driven to meet that level of protection for customers.”
“We’re not a commodity service provider … we’re not just alerting the customers … we take that ownership,” she added. “And it’s something that we are so strong at. So when we look at the competitive space and we say how are we going head to head [with competitors], I don’t really see that as a direct measure of our service capability.”
Eldon Sprickerhoff, founder and CIO of eSentire echoed that point, noting that his company’s sweet spot is its ability to respond to threats and share the experience it sees with one company with others in order to protect more companies from similar threats.
McLean added that eSentire plans to use its $100 million to evolve its brand and go-to-market operations to make that differentiation clear.
Cary Davis, managing director of Warburg Pincus, argued that eSentire “provides the most complete suite of technologies and services in the Managed Detection and Response market.”
Davis pointed to rapid growth over the past few years that has led to eSentire becoming a major player in the market.
That growth includes the acquisition of United States-based CyFIR, a cybersecurity firm offering digital forensics and investigative tools meant to minimize company financial losses.
eSentire also recently made changes to its C-suite, bringing on Matt Vitale as CRO, Erin McLean as CMO, Bob Layton as chief channel officer, and Anthony Lam as CFO.
“eSentire’s solutions are more critical than ever for any organization, given the heightened risk environment characterized by sophisticated cybersecurity attacks, the global need for talented cyber experts and the accelerating digitalization of the workplace,” said Thomas Birch, managing director of global venture capital and technology at CDPQ.
Over the next 18 months, eSentire plans to expand its platform as well as its geographic reach. To meet those goals, the company plans to hire 400 new employees, globally, with the aim of reaching more than 1,000.
Feature image courtesy eSentire.
