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The declination in VC financial backing for cybersecurity startups might finally be reversing class after month of discouraging trend lines .
latterly , Crunchbasereportedthat cybersecurity startups raised most $ 1.9 billion through 153 deals in Q3 — a 12 % increase from the $ 1.7 billion raised across 181 peck in the previous quarter .
There ’s anecdotic evidence of a turnabout , to be certain . Today , Graylog , a Houston - free-base company that develop tools to aid detect , analyze and respond to digital security threats , announced that it raised $ 39 million in a funding round atomic number 27 - result by Silver Lake Waterman , Piper Sandler Merchant Banking and Harbert Growth Partners .
That “ $ 39 million ” human body is a little misleading , however . Only $ 9 million of the tranche was equity — an extension of Graylog ’s $ 18 million Series C round that closed in June 2021 . The relief — $ 30 million — is in the form of what Graylog CEO Andy Grolnick is calling a “ flex debt ” facility .
“ Given that Graylog is close to being immediate payment - menstruum positive , the portmanteau word of fairness and debt enables the ship’s company to continue its potent trajectory and span to profitability while minimizing dilution for investors and employee , ” Grolnick said . “ While Graylog is not break evaluation , the late unit of ammunition represents a solid increase from the prior circle . ”
Graylog has its roots in an open source project launched in 2009 by Lennart Koopmann , a software engine driver , who at the time was assay to make a better way to manage and analyze automobile log data . Koopmann eventually market the overt source project to regain Graylog the caller , which hired Grolnick as CEO in later 2020 .
Graylog ’s original production suite , which it still offer , focuses on collecting , stash away and analyze log data point for IT troubleshooting and error detection . But through a combining of skill and in - house R&D , the company latterly fork into cybersecurity , roll out product — Graylog API Security and Graylog Security — for API menace monitoring , security analytics , incident probe and anomaly sleuthing capabilities .
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Grolnick claims that Graylog Security , launched in May 2022 , now represents over 50 % of Graylog ’s net young customer sales .
“ We ’ve visit our concern expand lately as our note value proffer has resonate with organizations looking for security answer that are as effective in find threat as they are in managing costs , ” Grolnick sum up . “ This has allowed us to subdue some of the macro challenges facing technical school ship’s company over the last year . ”
Graylog ’s competitor in theover $ 4.1 billion log management segmentspan Splunk , flexible and Sumo Logic , as well as newer entrants likeCoralogix , Logz.ioand CrowdStrike - ownedHumio . But Grolnick maintain that Graylog has momentum on its side .
Graylog ’s paid and open source puppet now serve more than 200,000 users across over 50,000 installations , he says . And among the companionship ’s client foundation are big defense mechanism customers like the U.S. Army , the U.S. Air Force , Lockheed Martin and SAIC .
Grolnick expects 110 - employee Graylog , which saw raw booking originate 67 % in Q3 year - over - year , to be immediate payment - flow positive in the 2nd half of 2024 .
“ The time was sound to raise upper-case letter for a couple of reasons , ” he read . “ First , we want to take advantage of the chance to build securities industry share in an environment where we were seeing our growth quicken . . . secondly , given our current trajectory , we had strong interest from both existing and Modern investor , which made the cognitive operation relatively smooth . The novel funds will be used to drive growth and bridge circuit to profitability . With the new cap , fundamental growth investiture are being made in product development , global sales and channel expansion and client success . ”
