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Multi-cloud security startup vArmour raises $41M more, led in part by new strategic Telstra

TechCrunch TechCrunch 24/05/2016 Ingrid Lunden

vArmour — a startup that offers security solutions specifically aimed at enterprises that run services and apps across multiple clouds — has raised $41 million in a Series D round of funding to help battle the rising problem of cybercrime, expected to cost between $500 billion and $2 trillion by 2019 to manage. This is a growth round for vArmour in more ways than one: in addition to getting a healthy cash injection, vArmour is also picking up a key strategic partner.

Alongside Redline Capital and other strategic investors that are not being named at the moment, Telstra — the large multinational carrier based out of Australia — is leading the investment and will use it to boost its managed services business, launching a new partnership with vArmour selling data center security services in Asia Pacific.

Tim Eades, vArmour’s CEO, would not disclose the new valuation but said it was “a good upround” from the previous valuation. To date, vArmour has now raised $83 million. You might recall how it entered the market in 2014 with a splash, having raised all of its previous funding while it was still in stealth mode, quietly building its software and picking up security customers along the way.

The upround is in part because vArmour is very much in that category of enterprise startups that is generating revenues from day one. Security startups are not always very forthcoming with their customer lists (for good reason, as you can probably guess), but to give you an idea of how vArmour is growing, the company currently has some 165 customers covering 100,000 virtual machines, Eades told me, and the target is to grow that to 450 customers this year.

He also said that the company was cash-flow positive as of last summer, although it’s now putting all its returns into growth. Its solutions have been described as less expensive than incumbent or rival solutions (it competes, Eades says, against the likes of Fortinet and Palo Alto Networks), although Eades claims that this is about efficiency, not margin slashing.

“What you are finding is that if you are a business with an old fashioned firewall or monitoring tools, the maintenance streams alone on those can fund getting our product,” he said. While it took hours to install vArmour when it first launched (still in stealth) today, he claims that the product can be installed “in 15 minutes, and you can have your data center segmented within an hour.”

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