SentinelOne Raises $120M To Battle CrowdStrike, Cylance

SentinelOne plans to use the proceeds from its series D round to establish a leadership position around securing IoT devices on the endpoint and reduce the number of agents customers are having to use.

SentinelOne has brought in an additional $120 million to better position the rising endpoint protection star to compete against endpoint security stalwarts CrowdStrike and Cylance.

The Mountain View, Calif.-based company plans to use the proceeds from its series D round to establish a leadership position around securing IoT devices on the endpoint and reduce the number of agents customers are having to use. The funding will enable SentinelOne to gain more market share from CrowdStrike and Cylance by further differentiating the company's product and go-to-market strategy.

"Not only do you want to align yourself with the very best from a technology standpoint, the cutting edge, you also want to align yourself with the program and the right people that take care of you and allow you to build a business around not just endpoint, but cybersecurity as a whole," SentinelOne Chief Marketing Officer Daniel Bernard told CRN.

SentinelOne faces an uphill battle against more established endpoint security players CrowdStrike and Cylance, but Bernard said the company has benefitted from its recent IoT investments as well as selling exclusively through the channel.

The company's IoT investments allow SentinelOne to upsell to its 2,500 existing customers as well as offer new customers IoT protection without cloud access or even an internet connection, Bernard said.

Specific to CrowdStrike, Bernard said SentinelOne benefits from not being reliant on the cloud as well as avoiding actions that would be unpopular with the channel liking taking deals direct or reducing the margin on renewals.

"We can take feedback from partners and do a much better job in bringing a true 100 percent channel go-to-market than CrowdStrike has done," Bernard told CRN. CrowdStrike said it was in a quiet period and would be unable to comment for this story.

SentinelOne has also seen a huge influx of Cylance replacements as well, with Bernard saying that solution providers tend to re-evaluate their options when consolidation occurs in the market and innovation and programs stop. Cylance was purchased in February by BlackBerry for $1.4 billion, and didn't immediately respond to requests for comment.

All told, SentinelOne's win rates against CrowdStrike, Cylance and Carbon Black have increased by 10 percent to 30 percent over the past year, according to Tim Mackie, vice president of worldwide channels.

"We're encountering them more and more, and we're actually winning against them more and more," Mackie told CRN. "We're capturing market share from these guys."

SentinelOne's series D round was led by Insight Partners, bringing the company's total funding to more than $230 million since being founded in 2013. The company has roughly 330 employees today, and Bernard hopes to increase SentinelOne's headcount to more than 400 over the next year by hiring more engineers with subject matter expertise and growing the development team.

The company will also add more sales and marketing personnel, but Bernard said SentinelOne plans to maintain as least half of its headcount in research and development functions. Roughly 53 percent of the company's workforce is focused on R&D today, according to Bernard.

From a partner perspective, Mackie said he's looking to architect channel infrastructure capable of supporting a business between $500 million and $1 billion in size. MSSPs will be vital to SentinelOne getting into more markets globally by offering multi-tenant management and monthly utility-based pricing options, according to Mackie.

Specifically, Mackie said the MSSP investment will put SentinelOne in a stronger position in Latin America and Southeast Asia, where the company hopes to make a move in the back half of 2019 and into 2020. SentinelOne currently has between 400 and 500 partners globally, and Mackie said the funding will allow SentinelOne to spend more money on MDF, SPIFFs and promotions for the channel.