Container security unicorn Sysdig bagged a hefty $188 million funding round as the use of containers and Kubernetes continues to ride a wave in popularity. The Series F round, announced a little over a year after the company’s $70 million Series E, pushed Sysdig’s valuation to $1.19 billion.

Third Point Ventures and Premji Invest led the latest round with participation from Accel, Bain Capital Ventures, DFJ Growth, Goldman Sachs, Insight Partners, Glynn Capital, and Next47, with the vendor stating strong interest.

“We could have more than double the size of the round simply based on extremely strong investor interest,” Sysdig CEO Suresh Vasudevan said.  

To date, Sysdig has raised $394 million since it was founded in 2013. It’s worth noting that in a previous interview with the San Francisco Business Times following the company’s Series E round lat year, Vasudevan said, "We expect this to be the last significant round, taking us all the way through for the next couple of years."

In referencing the company’s balance sheet, Vasudevan noted that Sysdig has spent less than 7% of the capital that was raised the previous round. So the real question is, given that the Series E funding is still more or less intact, what’s the need for more capital?

“It's become crystal clear that we're seeing an inflection in cloud adoption, and if anyone's now building new applications in the cloud, it's highly likely that they're going to build with containers and Kubernetes,” Vasudevan said. 

Sysdig has focused on addressing the challenges of cloud-native computing, namely security and performance monitoring in an environment where resources can spin up and down in a matter of minutes and traditional monitoring philosophies simply don’t work.

“The question we asked ourselves was with additional capital, can we accelerate our investment, can we extend our technology leadership, and market presence,” Vasudevan said. “The answer is yes.”

Sysdig will use the new funding to move into new markets in the Asia-Pacific region, add engineers to its research and development teams, and build relationships with major cloud vendors and continuous integration, continuous development (CI/CD) technology companies.

Vasudevan said that during the second half of 2020, growth in new contracts was 130% higher than the prior year. He attributes his company’s rapid growth to the growing importance of — and challenges around — cloud security, as well as customers turning to newer vendors to solve data and cloud security requirements “because the common vendor approaches don't really work well.” 

“When I look at the makeup of that, 85% of them are really large global enterprises that ... have really significant container and cloud security challenges, and they've reached the conclusion that existing incumbent vendors are not able to address that challenge," the executive said.

Over the last year, Sysdig has expanded its security capabilities beyond applications using containers and Kubernetes as microservices to address security for cloud applications in Amazon Web Services (AWS), Google Cloud, and IBM’s public cloud portfolio. 

“You have to look to startups with momentum as the ultimate winners of container and cloud security,” Vasudevan said. “For us that means the market opportunity is enormous.”

With that said, Sysdig has its sights set on doubling revenues every year and growing its community of contributors and customers by a factor of 10 over the next three years.

“This is a giant emerging market, Vasudevan said. “We think the container cloud security market is going to be larger than the endpoint protection market, which about a decade ago created giants in security like CrowdStrike, Tanium, SentinelOne, and others. We think the container cloud security market is going to be even larger when you think about the risk exposure that moving into containers and cloud creates.”

To that end, Vasudevan said he thinks there will be just a handful of security companies that are created by the adoption of containers, Kubernetes, and modern cloud applications. 

“I think the ability to build a technology platform with a strong differentiation acting as a competitive moat will result in two or three companies emerging as giant winners,” he explained. “For us, I think the ultimate prize is to emerge as a strong, independent company rather than being tempted by an acquisition.”