Expel, a managed security service (MSS) provider that companies outsource their cybersecurity to, has raised $50 million in a series D round of funding led by Alphabet’s CapitalG. The raise comes amid reports that cyberattacks have surged a third or more during the COVID-19 crisis, with bad actors capitalizing on increased remote working from insecure networks.
While there are already myriad security platforms out there designed to identify network threats, protect endpoints, and secure clouds, Expel essentially sits in the middle of all these services — it plugs into companies’ existing cybersecurity tools, be that Splunk or Darktrace, and makes them all work more effectively.
Expel is what is known as a “security operations center-as-a-service,” given that it monitors all the threats and anomalous behavior, serving businesses with plain-English advice rather than spitting out streams of alerts around every possible threat. Aside from its core platform, Expel also leans on human analysts who monitor their clients’ environments for threats, investigating and responding as necessary, while also proactively searching for malicious activity.
CapitalG general partner Gene Frantz, who now joins Expel’s board as a result of its investment, said that enterprises are facing “an inexhaustible supply of bad actors” that seek to attack them, and the security platforms they rely on require significant human resources to wade through the deluge of alerts that they generate. At its core, this is what Expel is setting out to address — it helps businesses scale their cybersecurity operations without worrying about finding the talent themselves.
Register today and save 30% off digital access passes.
Indeed, much has been written about the cybersecurity skills gap, with a recent study by (ISC)² looking at the cybersecurity workforce in 11 markets. The report found that while 2.8 million people currently work in cybersecurity roles, an additional 4 million were needed — a third more than the previous year. While AI and automation may play a role in plugging this gap, what companies such as Expel promise is a fully-equipped security operations center on tap — powered by technology and human security analysts.
Prior to now, Expel had raised nearly $68 million, including a $40 million tranche less than a year ago, and with another $50 million in the bank it said that it would invest in sales and marketing, expand globally, and double down on its cloud security offering which covers public cloud platforms including AWS, Azure, and Google Cloud Platform. Other investors in the round include existing backers Battery Ventures, Greycroft, Index Ventures, Paladin Capital Group, and Scale Venture Partners.
The global cybersecurity market was pegged as a $119 billion industry in 2018, a figure that is expected to more than double within four years. Although the general feeling at the moment is that demand for cybersecurity should continue to accelerate due to the impact of COVID-19, a Research and Markets report today suggests that the pandemic could actually slow the sector’s growth due to reduced budgets.
The MSS segment specifically was reportedly worth $25 billion in 2018, and is shaping up to rise to nearly $50 billion in the coming years.
An Expel spokesperson said that while it hasn’t necessarily seen any significant increase in demand in recent months that can be correlated with COVID-19, it considers that the cybersecurity market will remain strong in the coming years. And clearly, with big-name backers such as Capital G, investors think that managed security services could even be in greater demand. Just a couple of months ago, Expel’s rival Arctic Wolf closed a fresh $60 million in funding.
Funding Weekly to start your week with VB’s top funding stories.