Insider threat management provider ObserveIT closed a $33 million Series B funding round. It includes participation from Bain Capital Ventures, Spring Lake Equity Partners, and NightDragon Security, the cybersecurity investment firm founded by Dave DeWalt, former chief executive at McAfee and FireEye.
This brings the Boston-based security startup’s funding total to $58 million.
The company says it has more than 1,700 customers around the world. It plans to use the investment to further develop its insider threat management software and expand its sales and marketing teams to support growing global demand.
Additionally, DeWalt will join ObserveIT’s board of directors.
One-quarter of all security incidents involve insiders, according to Verizon’s annual Data Breach Investigations Report. These insiders aren’t necessarily employees. Third party vendors, contractors, and partners could pose a threat as well.
ObserveIT’s endpoint software uses session recordings and helps identify insider threats by identifying anomalous behavior in real time. Sensitive keywords and commands can trigger alerts, and the software can also detect data exfiltration attempts when users type protected keywords. It can also block user activities that breach security or other company policies.
The latest version of the software, ObserveIT 7.5, has seen the fastest adoption since the company’s launch in 2013. In the past 12 months, the company claims it increased customer deals by 185 percent year over year while also increasing new customer deal size by more than 250 percent year over year.
Hot Market for Security Startups
The company’s funding announcement follows a series of successful Series B rounds over the past month by other security startups. ThetaRay raised $30 million bringing its total funding to $60.5 million. Preempt raised $17.5 million bringing its total funding to $27.5 million. Jask raised $25 million bringing its total to $39 million. And Balbix raised $20 million bringing its total to $28.6 million.
It’s also been a good year for security company initial public offerings (IPOs). Zscaler raised $192 million from its March IPO and now has a market cap of $4.77 billon. In May Carbon Black raised $152 million in its IPO. And earlier this month Tenable Network Security filed documents with the U.S. Security and Exchange Commission proposing to launch an initial public offering. The company has said it plans to raise about $100 million, but that amount is subject to revision.