Crowdstrike Lands $100M In Series C Funding, Plans Aggressive Channel Expansion

Crowdstrike has landed $100 million in Series C funding, including a big buy-in from Google Capital, money the next-generation endpoint security startup says it will put toward its growing channel program.

Revealed Monday, the latest round of funding for the Irvine, Calif.-based company was led by Google Capital with participation from existing investors Rackspace, Accel and Warburg Pincus. It brings the company's total funding raised to $156 million.

"It's really exciting," co-founder and CEO George Kurtz said in an interview with CRN. "Obviously there's a lot of interest in Crowdstrike, but when you get an investor like Google that's real validation."

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Crowdstrike's Falcon Host platform is a new take on endpoint security based on a Software-as-a-Service architecture that focuses on "indicators of attack" instead of "indicators of compromise." The platform is run entirely in the cloud, with only a sensor that runs locally. The company also offers Falcon Intelligence for threat intelligence and Falcon DNS for identifying and blocking malicious DNS callbacks.

Kurtz said the startup has been displacing some of the top endpoint technology companies with on-premise solutions, such as FireEye's Mandiant and Bit9 + Carbon Black. On top of that, while the company is mostly additive to antivirus solutions, he said many clients are also turning away from those solutions to rely almost entirely on the Falcon Host platform. That success has driven a 550 percent CAGR for annual recurring revenue for the past three years.

The new funding will be focused around growing Crowdstrike's customer acquisition strategy, including a geographical expansion further into Europe and Asia-Pacific, Kurtz said. Crowdstrike has already been on a customer acquisition growth tear, the company said, with a 225 percent growth in annual contract value and a 700 percent increase in the number of $1 million or greater transactions. The company will also bolster its engineering work to continue improving its flagship Falcon Host platform.

Growing the company will come, in large part, from "aggressively" building out the Crowdstrike channel program, Kurtz said. The company will be boosting its infrastructure for partners as well as bringing on more channel account managers.

That push is part of a strategy from Crowdstrike to be a "channel-first" company, Kurtz said. The company already does a majority of its deals through the channel, but Kurtz said the ultimate goal is to "put everything through the channel as best as we can."

"That's an important area for us," Kurtz said. "When we first started out of the gate, you've got to get your own sales. But, what we're focused on now is being a channel-first company."

Kurtz said the company, in particular, is focusing on developing its managed service provider channel, as its cloud architecture is a good fit for the MSP business model. To that end, the company has also formed key partnerships with vendors such as Rackspace, which is also an investor in the company, around its cloud technology. Building those relationships with MSPs will, in turn, help the vendor move downstream from its current large and small enterprise target market, he said.

"That's a big route to market for us," Kurtz said. "From a channel perspective ... we're a channel-first company."

PUBLISHED JULY 13, 2015