Abnormal Security Hits $4B Valuation in 4 Years
Abnormal Security reached a major milestone today: The four-year-old company is now valued at $4 billion after raising $210 million in Series C funding. In VC, we often talk about valuation, throwing around such enormous numbers that we sometimes lose sight of their meaning. But when you stop to think that the valuation of a startup reflects the results of an analytical process aimed at understanding the worth of a company, it’s no small feat that today, Abnormal Security is valued at $4 billion just four years after it was founded.
How did Abnormal do it?
- They targeted a large market in desperate need of a better solution. Abnormal focused on solving an enormous and costly issue plaguing the modern enterprise: Defending the modern workforce against sophisticated email attacks. These increasingly frequent and advanced attacks drive significant cybercrime losses, with businesses reporting $2.4B in losses from email compromises last year.
- They used AI to replace a broken manual workflow. Before Abnormal, overwhelmed security teams were forced to supplement insufficient software solutions with a layer of people—a costly, clunky, and hard-to-scale stopgap. Abnormal delivers a fundamentally different approach that precisely detects and protects against the broadest range of attacks, including business email compromise, phishing, malware, ransomware, social engineering, spam and graymail, supply chain compromise, and internal account compromise. The platform relies on AI-based behavioral data science to stop the socially-engineered and novel email attacks that stymie even the most sophisticated security teams and evade traditional email gateways (SEG).
- They delivered an easy-to-use, flexible end-to-end solution. The Abnormal platform offers inbound email security, internal and external account takeover protection, and full SOC automation. Abnormal’s API-based approach enables customers to get started in minutes and can augment an SEG or be used standalone to enhance native cloud email security protection.
The proof is in the product-market fit
Today, Abnormal protects more than 5% of the Fortune 1000 and numerous notable companies, including Xerox, Hitachi Vantara, Urban Outfitters, Groupon, Royal Caribbean International, and Auto Club Group-AAA. And those customers aren’t going anywhere: Abnormal boasts an incredible 99% renewal rate and a 4.9/5 rating for Gartner® Peer Insights™, with a 100% recommendation from participating companies.
As venture capitalists, it’s our jobs to identify standout companies before they are obvious. We’ve laid out a framework for investments within cybersecurity, and Abnormal represents many of the qualities we seek. The key to our checklist is Founder DNA, and I would say that’s where they really shine. And “team” is the answer to how they built such an important business in just four years. We are excited to partner with Evan, Sanjay, and the entire rest of the team at Abnormal security and continue to back them on their journey.
This is just the beginning
It’s been a record-setting year for Abnormal. The company tripled its annual recurring revenue, doubled its employee headcount, and unveiled its next-generation email security platform: Abnormal Integrated Cloud Email Security (ICES). This new round is just the latest milestone they’ve marked, and it will fuel their growth as they accelerate their AI platform innovation to better protect our customers and continue expansion in Europe, Asia, and Japan.
Cyber fraud will never go away. For that reason, we believe Abnormal will continue to be a category leader. Along those same lines, cybersecurity will continue to be an area of intense focus for Menlo as we build on our impressive portfolio of market leaders that includes Sonrai Security, Appdome, BitSight, Dedrone, and StackRox.
If you are a founder of a cybersecurity company, you can read more about how we evaluate investments here. And, if you think your company fits that framework, we’d love to hear from you.