Cloud Security Vendor Netskope Raises $169M For Global Expansion

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Netskope has hauled in $168.7 million to enable more cutting-edge research and development and drive large scale global data center expansion.

The Santa Clara, Calif.-based cloud security vendor said its Series F round led by Menlo Park, Calif.-based venture capital firm Lightspeed Venture Partners, and included participation by Accel, Base Partners, Geodesic Capital, Iconiq Capital, Sapphire Venture and Social Capital. Netskope has now raised $400.1 million in six rounds of outside funding since being founded just six years ago.

"We have spent the last six years bringing the leading security cloud to enterprises to address this growing challenge as more and more companies embrace digital transformation," Netskope CEO Sanjay Beri said in a statement. "With this new round of funding, we are one step closer to helping all organizations match their security strategy with the pace of today's cloud-first world."

[Related: Netskope Lands $100M In Series E Funding, Plans More Channel Investment]

Increased global demand for cloud security has prompted Netskope to increase its employee headcount by 50 percent and open a new headquarters to accommodate growing staff. At an executive level, those hires include Vice President of Corporate Development Dave Daetz and General Counsel Jim Bushnell. All told, Netskope currently employs 662 people, according to LinkedIn.

Nearly 90 percent of organizations have adopted digital-first strategies to help operate in a more cost-effective manner, deliver on-demand customer service, and accommodate a globalized workforce, according to Netskope. To achieve this digital-first approach, companies are turning to cloud services such as AWS, Box, Dropbox, Google G-Suite, Microsoft Office 365, Slack, and Workplace by Facebook.

These cloud services are built using the new language of the Internet and shift much of the administrative control away from IT, according to Beri. This increases digital risk and creates new challenges for security teams, Beri wrote in a blog post.

Legacy cybersecurity vendors have reacted to the increased adoption of cloud services by acquiring companies and cobbling disparate architectures and products together, Beri said. But in reality, Beri said these products were designed for environments where applications were placed in centralized data centers and IT teams were primarily responsible for selecting and deploying apps.

Netskope is uniquely positioned to help businesses in their digital transformation journey since the company was born in the cloud, according to Beri, with the company delivering visibility and control, data loss prevention, and threat protection for software-as-a-service, infrastructure-as-a-service, and the web from a single cloud architecture.

"Transforming enterprise security is no longer a nice-to-have, but a requirement in order to protect and secure a company's most important assets," Arif Janmohamed, partner at Lightspeed Venture Partners, said in a statement. " Since its launch, the company [Netskope] has continued to adapt to the evolving security landscape and bring innovative solutions to market."

After two years of massive consolidation, Netskope is today one of the final major standalone cloud access security broker (CASB) on the market. The CASB acquisitions began in 2016 when Cisco, Oracle and Proofpoint bought CloudLock, Palerra and FireLayers, respectively, and continued last year with Forcepoint's purchase of Skyfence and McAfee's purchase of Skyhigh Networks.

Netskope is one of just four vendors named as a leader in Gartner's Magic Quadrant for Cloud Access Security Brokers, alongside fellow standalone CASB player Bitglass as well as McAfee and Symantec (which bought Blue Coat Systems in 2016).

Netskope is the first cybersecurity vendor outside of the endpoint space to receive a funding round in excess of $100 million this year. Tanium hauled in $175 million in outside funding in May and an additional $200 million in October, while in June, CrowdStrike and Cylance brought in $200 million and $120 million of outside funding, respectively.