Security Startup Tanium Lands $52 Million More, Looks To Add Channel Partners

Endpoint management and security startup Tanium has landed $52 million in additional funding from venture capital firm Andreessen Horowitz, the company reported Tuesday.

The latest round of funding adds to the $90 million initially invested by Andreessen Horowitz last year, which makes the combined investment one of the largest in the renowned venture capital firm's tech startup portfolio.

The investment comes on the heels of a year of strong growth for the Emeryville, Calif.-based company, which slated quadrupled growth in total billings and 800 percent growth in the the number of transactions over $1 million. The new investment, in turn, will create a huge opportunity for Tanium channel partners, as the company will remain "heavily channel-focused" as it continues to grow, co-founder and Chief Technology Officer Orion Hindawi said.

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"What partners are getting out of this funding is a redoubling on Tanium's side ... for them to succeed," Hindawi said.

The next leg of that growth plan is continuing an international expansion that began at the beginning of the year, with employees already hired in London, Tokyo and Australia. While the company originally planned a slow expansion, Hindawi said, it has already landed two multimillion-dollar deals through partners and plans to accelerate that opportunity. Based on the current demand environment, that could mean hiring 700 to 800 employees, he said.

However, while Tanium has growth plans, Hindawi said the company has "no real plans" to use the recent influx of funding for that expansion. Instead, he said, the company will self-fund its growth and tuck away its new funding, as it did the first round of $90 million, in case of pullbacks in the economy that would affect security spending.

"I want to make sure that Tanium is on secure footing so that, while we're expanding, we don't have to be constantly looking over our shoulder at macroeconomic trends," Hindawi said. "I think it's important for our customers and our partners. If you look at the security market in general, there are a lot of companies that, if they don’t get funding, they will cease to exist. That's a really scary thought. Tanium will never be that company."

As the company continues to grow, Hindawi said, it will maintain its strong focus on the channel. Right now, the company does around 90 percent of its business through channel partners, he said.

"You've got a company that's very channel-friendly that values what partners bring to us," Hindawi said. "If we are hitting our plans, we are going to grow 400 percent again. ... I think partners are going to have a huge opportunity to play in that."

Mark Behan, director of security solutions at Dimension Data, said the systems integrator has an emerging partner relationship with Tanium, driven by the speed and scale of its endpoint information-gathering capabilities and variety of security use cases. For those reasons, Behan said, the new funding "isn't surprising," as Tanium addresses issues that are important to many clients of Dimension Data, which has its global headquarters in Johannesburg and its national headquarters in New York.

"I think they are at the forefront of what our clients are looking for: visibility, awareness of where a particular piece of malware might have spread, and Tanium can also help with the remediation of the malware. ... It's the scale at which we operate -- that’s really impressive. That’s a big differentiator for our global clients," Behan said.

Behan said Tanium's proposed international expansion was particularly compelling.

"As a global systems integrator, it will be very useful for us if Tanium has presence in the regions that we operate....if that’s how they want to use the funding that would align well with Dimension Data," Behan said.

Hindawi said that going forward, Tanium is looking to continue expanding its partner base, but is looking for quality over quantity when it comes to partners who have a deep understanding and evangelization of the platform.

"We're open to really strong people who want to work with us and invest on both sides," Hindawi said. "This is the time when Tanium is going to dramatically expand its market presence again, and we want to do that through the channel."

PUBLISHED MARCH 31, 2015