TCV Invests in Machine Identity Protection Provider Venafi – A Pioneer of a Vital New Category in Cybersecurity

Category-creating companies typically tackle a problem people didn’t know they had, or a problem considered too big to solve. Under CEO Jeff Hudson, Venafi has taken on one of the largest unrecognized problems imaginable: managing the encrypted communications between the machines that run in every organization and the internet. As result, Venafi is defining a new category called Machine Identity Protection.

At TCV, we’ve been watching the number of machines grow exponentially. It’s not just that IoT (Internet of Things) is connecting physical devices to the internet. It’s the software machines – virtual servers, containers, microservices – that are proliferating even faster due to cloud computing and the shift to mobile apps. These software machines are now creating machines on their own. Everything we do online involves machines identifying each other before granting access, delivering data, or conducting transactions. If those encrypted connections are not secure, nothing is.

But surprisingly few companies are trying to crack this problem at the necessary scale. Instead, the world poured billions of dollars into securing human identities, while the number of machine identities grew exponentially behind the scenes. When Jeff Hudson came to Venafi in 2010, driving the company’s evolution toward machine identity protection, we saw a great fit with our core investment thesis that continued growth in the digital economy depends on security. Creating the Machine Identity Protection category positions Venafi at the intersection of multiple major tech trends including cybersecurity, the cloud, IoT, SaaS, and DevOps. So we are truly excited to invest in the company and partner with Jeff’s team in scaling Venafi to its full potential.

The company has plenty of momentum, with more than 300 customers, and with its portfolio of 30 patents, Venafi has lifted machine identity out of the fragmented, nuts-and-bolts phase and elevated it to full solution status. The Venafi platform gives enterprises global visibility into their machine identity risks, generates actionable intelligence for managing them, and automates the processes for addressing them. Early adopters have learned that the Venafi platform transcends and unifies many of the security point solutions out there, from inventorying and policy enforcement to analytics and threat detection. And once customers discover what Venafi can do for them, they want more.

None of this comes as a surprise, because Jeff has a rare combination of strategic vision and disciplined execution. He plays the long game and that’s why he increased Venafi’s R&D efforts to address a problem most people didn’t see coming: the need to secure encrypted communication not just between people and machines, but between the machines themselves. At TCV, we also witnessed Jeff’s skill in recruiting world-class talent at a time when the supply of engineering talent is getting tight, particularly in the cybersecurity sector.

Jeff and his team recognize the critical role security plays in the digital economy. It’s not just about selling product, it’s about securing connections, data, and commerce. It works with anyone’s cloud and any type of machine. The open, public key infrastructure (PKI) system that underlies internet security has created a horde of “Certificate Authorities” (CAs), to the point that many large companies don’t know how many different CAs they are dependent upon. We believe Venafi dissolves these complexities, giving enterprises a unified, vendor-agnostic, dashboard-driven view of machine identity.

Given the growing risks that all companies and consumers face from cybercriminals, it’s essential that the fragmented security industry find more cohesive solutions, and Venafi is showing a way forward. TCV is excited to come onboard and contribute to the journey.

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The views and opinions expressed in the blog post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. Certain information contained herein has been obtained from third-party sources, including any portfolio companies described above. Such information has not been independently verified by TCV, and TCV does not assume responsibility for the accuracy of such information.

For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

 


Venafi Secures $100M Financing Round Led by TCV

Salt Lake City–November 29, 2018–Venafi®, the leading provider of machine identity protection, today announced the closing of a $100 million round of financing, led by TCV with additional participation from existing investors, QuestMark Partners and NextEquity Partners. TCV is one of the largest and most respected providers of capital to growth-stage private and public companies in the technology industry and has backed industry-leading companies, including Airbnb, Alarm.com, Cradlepoint, Genesys, Netflix, Rapid7, Silver Peak, Splunk, Spotify and Zillow. As part of the transaction, TCV general partner, Jake Reynolds, joins Venafi’s board of directors.

The funding will be used to accelerate Venafi’s growth and to cement the firm’s growing market leadership. In addition to fueling growth, $12.5 million of the investment will be made available to third-party developers in the first tranche of the new Machine Identity Protection Development Fund. Venafi created the fund to accelerate the integration of machine identity intelligence into a wide range of machines in the enterprise and further enhance and expand the machine identity ecosystem. The fund will allow developers, including consultancies, systems integrators, fast-moving startups, open source developers and cybersecurity vendors to apply for sponsorship. This sponsorship will allow recipients to build integrations that deliver greater visibility, intelligence and automation for Venafi customers across any technology that creates or consumes machine identities.

“Identity is the foundation of security,” said Jeff Hudson, CEO of Venafi. “The cyber world is made up of machines, and all machines require identities for the cyber world to be secure. As a society, we understand the risks associated with human identity theft very well, and we spend over $8 billion per year protecting human identities. However, most organizations don’t yet understand the risks associated with machine identities and, as a result, spend almost nothing to protect them. This leaves our global digital economy at risk. TCV has a long history of partnering with the world’s leading technology firms, so we’re very excited about the opportunity to work with them. Their investment and expertise will help us ensure that the world’s machines, including hardware and software from smart machines, virtual servers, applications, containers, and more, are connected, safe and secure.”

Just as usernames and passwords are used to identify and authenticate humans, machine identities enable the trusted relationships between machines that control the flow of sensitive data. Because machine identities are poorly understood and often unprotected, they are subject to being exploited by cybercriminals. The Venafi platform protects the machine identities whose underlying technology is cryptographic keys and digital certificates by providing unparalleled visibility, intelligence and automation.

“The team at TCV is excited about our partnership with Venafi,” said Jake Reynolds, general partner at TCV. “DevOps and IoT are driving growth in the number of machines thanks to cloud computing, virtualization, and the proliferation of connected devices. Venafi is well-positioned to provide the machine identity protection for enterprise machines, and we look forward to supporting the Venafi team as they continue to scale in this rapidly expanding market.”

With over 30 patents, Venafi delivers innovative machine identity protection solutions for the world’s most demanding, security-conscious Global 5000 organizations, including the top five U.S. health insurers; the top five U.S. airlines; four of the top five U.S. retailers; and four of the top five banks in each of the following countries: U.S., U.K., Australia and South Africa.

For more information about the fund please visit: https://www.venafi.com/machine-identity-protection-fund

About Venafi

Venafi is the inventor and cybersecurity market leader in machine identity protection, securing connections and communications between machines. Venafi protects machine identity types by orchestrating cryptographic keys and digital certificates for SSL/TLS, IoT, mobile and SSH. Venafi provides global visibility of machine identities and the risks associated with them for the extended enterprise—on premises, mobile, virtual, cloud and IoT—at machine speed and scale. Venafi puts this intelligence into action with automated remediation that reduces the security and availability risks connected with weak or compromised machine identities while safeguarding the flow of information to trusted machines and preventing communication with untrusted machines.

For more information, visit: www.venafi.com.

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $10 billion in leading technology companies and has helped guide CEOs through more than 115 IPOs and strategic acquisitions. TCV’s investments include Airbnb, Altiris, AxiomSL, Dollar Shave Club, EmbanetCompass, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, OSIsoft, Rent the Runway, Sitecore, Splunk, Spotify, Varsity Tutors, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com/.

Contacts

Venafi
Shelley Boose
shelley.boose@venafi.com
408.398.6987

TCV
Katja Gagen
kgagen@tcv.com
415.690.6689