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Security and systems management startup Tanium said today that it has landed a $52 million investment from venture capital firm Andresseen Horowitz.
The deal, led by Andreessen partner and former Microsoft executive Steven Sinofksy, brings the VC firm’s total investment in Tanium to a combined $142 million. That makes it the firm’s largest single position, larger even than its $100 million investment in GitHub in 2012. It’s also Tanium’s only outside investor.
Sources familiar with the terms of the deal tell Re/code that the investment values Tanium at $1.75 billion. That’s up from $900 million when Tanium raised $90 million from Andreessen last year.
So what does Tanium do that makes it so valuable? It’s a combination of IT security and management of large-scale corporate IT environments. It is software that can quickly — and by quickly I mean within seconds — scan and map out all the machines and devices running on a corporate network — not just PCs and servers, but also virtual machines running on those servers and embedded devices like printers. IT managers like to call these “endpoints.”
Once it maps all these endpoints, it can find out what software is running on each of them and determine quickly whether it’s in need of patching or updating. One of the biggest jobs in securing a network from attacks by hackers is making sure that every one of these endpoints has been patched with the latest software fixes.
Tanium co-founder and CTO Orion Hindawi said it’s not uncommon for a company with 100,000 computers to have a backlog of 250,000 software patches to install. “Every company has a patch management system, but they never work very well. And each of those patches fixes a known security vulnerability,” he said. “It creates a situation where you’re guaranteed to be fighting fires all the time.”
He knows a thing or two about these patch management systems. His first company was one of them: BigFix was a software firm that specialized in automating software updates for PCs and other systems. He started it in 1997 and by 2010 had sold it to IBM in a deal that was said at the time to be worth about $400 million. It’s now a product known as IBM Endpoint Manager.
Sinofsky announced the deal in a blog post. He writes that once a security breach becomes known, the most important job in the hours and days that follow is to figure out how many systems are affected by the breach and shut them down so that the problem doesn’t spread and give attackers further access to a network, and the traditional tools used to do that aren’t up to snuff in an age of sophisticated attacks. “Systems management is now an integral part of incident detection and response,” he writes. “Conversely, security and protection require full knowledge and control of endpoints. Neither set of existing tools deployed in most environments is up to the task.
Hindawi says he has turned away investment offers from other firms, and also said he doesn’t actually need the money that Andreessen is bringing in the door. “We’ve been profitable since 2012,” he said. Tanium has already been deployed to some 10 million endpoints at large companies, and at several federal agencies including branches of the Defense Department. Some customers are using it to manage networks of hundreds of thousands of systems. “The reason we’re taking the money is not because we need to spend it today. We’ve grown bookings and billing and headcount by about four times in the last year.”
The money he said, will be used to spearhead international growth. Tanium has mostly done business inside the U.S. A few early salespeople have shown it to customers in Europe and Asia, and it was clear right away there was a lot of potential business. “What we’re seeing in countries like Japan is just obscene,” Hindawi said. “It would be negligent for us not to chase it.”
This article originally appeared on Recode.net.
