Posted on Tuesday, Nov 14th 2017
According to a MarketsandMarkets report, the Cyber Security market is projected to grow from $137.85 billion in 2017 to $231.94 billion by 2022, translating to a CAGR of 11% over the next five years. Market growth is driven by the growing security needs of Internet of Things (IoT) and Bring Your Own Device (BYOD) trends and increased deployment of web and cloud-based business applications. Recently, Billion Dollar Unicorn ForeScout Technologies, which focuses on the IoT segment, went public.
Founded in 2000 by Israeli entrepreneurs, Oded Comay, Doron Shikmoni, Hezy Yeshurun, and Dror Comay, California-based ForeScout is a Cyber Security company that specializes in the space of visibility. It offers Global 2000 enterprises and government organizations access to a platform that allows them to see devices including non-traditional IoT devices and BYOD endpoints when they connect to the network. Its proprietary agentless technology discovers and classifies IP-based devices in real time and continuously monitors and assesses their security posture. Its solution supports heterogeneous wired and wireless networks, virtual, and cloud infrastructures and can scale to meet the needs of globally distributed organizations.
Forescout sells its solution as either a physical or virtual appliance through a perpetual software license, with each appliance designed to manage a certain number of connected devices within an organization. To enter the enterprise segment, Forescout recently started selling its solution as a software-only license with the enterprise license designed to manage a certain number of connected devices within an organization.
Forescout’s products have been well-liked by the market. As of June 2017, it had more than 2,500 end-customers in 70 countries and a customer list that included 17% of the Global 2000. For the last three years, revenues have grown from $71.1 million in 2014 to $126 million in 2015 to $166.8 million in 2016. Analysts estimate Forescout to end 2017 with revenues of more than $200 million. For the six months ended June 2017, revenues grew 32% to $90.6 million.
Despite the revenue growth, Forescout continues to report losses. Losses have grown from $27.3 million in 2015 to $74.8 million for the year ended December 2016. For the six months ended June 2017, net losses grew from $39.6 million a year ago to $47.7 million.
I recently spoke with Forescout’s CEO Michael Decesare. He believes Forescout is different from its competitors by filling the gap created by the new devices that don’t make themselves identifiable in the traditional ways that Cyber Security vendors typically identify them. But ForeScout surely isn’t the only one addressing this problem. There are bigger players like Cisco, which offers a similar service through the Identity Services Engine. Cisco also benefits by being able to bundle the offering into its existing Cyber Security and networking options.
Till recently, Forescout was venture funded with $121.6 million raised from investors including Wellington Management, Accel, Amadeus Capital Partners, Aspect Ventures, Cross Creek Advisors, Founders Circle Capital, ITOCHU Corporation, Meritech Capital Partners, and Pitango Venture Capital. It had raised $76 million in January 2017 in a round led by Wellington Management where it was valued at $1 billion. Last month, the company went public under the ticker FSCT on the Nasdaq and raised $116 million at a valuation of $800 million. Its stock is trading at $25.12 with a market capitalization of $930 million, close to its billion dollar valuation.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
Photo Credit: Blue Coat Photos/Flickr.com
This segment is a part in the series : Billion Dollar Unicorns
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