Israeli-American company ObserveIT has closed an $33 million Series B financing round. US funds and investors participated in the round, including NightDragon Security, the cyber investment fund founded by former McAfee and FireEye CEO Dave DeWalt. Other participants included Spring Lake Equity Partners and Bain Capital Ventures, the controlling shareholder in the company. ObserveIT has raised a total of $55 million to date.
ObserveIT is developing a cyber defense system against threats from within a company. It is designed to prevent mainly information leaks through company employees. Gabriel Friedlander and director Avi Amos founded the company in 2007, and it was acquired by Bain Capital in 2013, which moved the company's headquarters to Boston, while leaving its development center in Israel. ObservIT has 150 employees, including 70 in Israel. It has 1,800 customers in 87 countries.
ObserveIT CEO and director Michael McKee told "Globes" that the company would use the money that it raised for technological development and expanding its volume of business. He added that the company was growing at 65% a year and that its revenue had reached $25 million in 2017. He commented that he anticipated no exit or public offering in the coming years; the company plans to make a major effort to expand. "In the coming years, we will take the company to a point at which it will achieve $100 million in revenue. When we get there, we may hold another financing round that will enable us to grow and become a $500 million company. That's our challenge - to build the company as a global company."
Is ObserveIT an Israeli company or a company acquired by a US company? McKee says that the international market is less interested in this question: "We proudly tell customers that the company was founded in Israel, and that automatically gets us respect for our technology, but what the customers really want is global service and global access, because most of them are global companies." He says that the company's location in Tel Aviv and Boston, both of which are leading global cyber security centers, is no accident. It provides the company with excellent access to the international cyber security industry.
McKee notes that one of the company's current tasks is to expand its development in Israel and he plans to recruit 10 more employees in the near future and 10 more later. McKee says that the company plans to move to new offices in the Alon Tower as part of its expansion program.
New investor DeWalt said, "Internal threats are the biggest threats now facing organizations, which are having difficulty in protecting their most valuable assets. ObserveIT is in an excellent position to cope with these challenges directly, because it enables organizations to detect hazardous behavior by users in real time, while preventing data leaks."
ObservIT reported a rapid pace of adoption for its ObserveIT 7.5 system for managing internal threats. Over the past year, the company has increased its number of deals with customers by 185%, while increasing its deals with new customers by over 250%.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2018
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