Tanium is an enterprise security and system management startup which lets IT control an entire network using natural language in a search engine-like interface. It raised a significant $90 million from Andreesen Horowitz last year – the firm’s largest initial investment ever.
Making this even more unique is the fact that this was the first VC investment the startup had ever taken. Tanium has now raised an additional $52 million from the firm to help it scale faster.
Tanium experienced quite the growth spurt since that initial investment. According to the company it quadrupled growth in total billings and number of employees year-over-year, added several top banks and retailers, including 50 of the Fortune 100 as its customers and ended 2014 cash flow positive, debt free, with total cash in excess of $100 million.
But with all that cash, why the raise? “As the old adage goes, you raise when you don’t need it,” CTO and co-founder Orion Hindawi says. “We’ve never had a quarter where we spent more than we raised, but I saw the economic downturn in the early 2000’s and so did a lot of people on my team. I think there will be some right-sizing in the near future. I want to focus on growing the business and not raising before I run out. It’s prudent that we have enough cash before we need it.”
Hindawi and his startup seem to be in the right field at the right time, too. Cyber security has become a big focus of the Obama administration and is an increasingly important topic for corporate America. Nearly 40 million credit card numbers were stolen in a Target attack and millions of data points of information were exposed in the Sony attack this last year.
“If you look at almost every attack, the reason for every attack is the company was not 100 percent compliant on security,” Hindawi told TechCrunch. Companies such as Target and Sony took days or weeks to pinpoint where attacks were coming from. “The attacks can change every 5 minutes. Target had no way to figure out where they were getting attacked fast enough to shut it down,” he said.
Hindawi has been in the industry for a long time, starting with an IT management solution he created called Bigfix (sold to IBM) back in 1997. He says most tools out there either do only one or two things such as patch management or they are owned by major corporations and stuck in decades old technology. He accounts the ability to identify and patch attacks in real-time over a large network as the reason for Tanium’s success.
A16z partner Steven Sinofsky described the reason for the initial investment on the firm’s blog:
When we talk about Tanium we describe it as an entrepreneur “trifecta”: First, David and Orion are experienced and successful entrepreneurs. Second, Tanium is a product that builds on innovative and inventive technology that could only come about from a team with experience and depth of understanding the enterprise. And third, Tanium is already a successful and profitable company with dozens of customers in massive, mission-critical, and global deployments.
Tanium intends to use the money to continue its product growth and to expand into new markets globally, with specific emphasis on international expansion in Europe, the Middle East and Africa and the Asia Pacific region. So basically everywhere.