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As Cyberattacks Surge, Security Start-Ups Reap the Rewards


On a Friday evening in October, Mr. Chandna, the Greylock venture capitalist, introduced the chief executive of an email security company he had invested in, Abnormal Security, to another investor, he said. That investor, Venky Ganesan of Menlo Ventures, who had been pursuing a meeting with the chief executive, Evan Reiser, for months, immediately emailed Mr. Reiser to invite him to dinner that night.

Mr. Reiser drove, he said, from San Francisco to Mr. Ganesan’s home in Atherton, Calif., about 30 miles away. By the end of the weekend, Abnormal had signed a deal to raise $50 million at a $600 million valuation, putting its total funding at $74 million. Menlo’s $40 million check was the firm’s largest investment ever.

“As shotgun weddings go, it’s as shotgun as you can get,” Mr. Ganesan said.

Since then, the ransomware attacks have given the funding wave a further boost.

In January, Lacework, a cloud security start-up in San Jose, Calif., garnered $525 million in funding. Investors reached out because of Lacework’s products, which use artificial intelligence to identify threats, said Andy Byron, the company’s chief resource officer. In total, Lacework has raised $625 million since it was founded in 2015.

Mike Speiser, a venture capitalist at Sutter Hill Ventures, which led Lacework’s January financing, had no problem getting other investors to participate, he said.

“I called the five people that I thought were the best investors and asked them if they were interested. They were all interested, and within 48 hours we had a deal,” Mr. Speiser said. “One hundred percent of the people I called said they wanted in. We could have raised well over $1 billion.”

Business has boomed for Lacework because of “the combination of all of these ransomware and nation-state attacks, together with people moving to the cloud so aggressively,” said David Hatfield, who joined the start-up in February as chief executive.


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