Security startup Tanium raised $100 million in a sale of common stock — a move the company billed as a “resounding vote of confidence” from the investor community, and the Wall Street Journal described as “a liquidity event for insiders following a spate of negative publicity.”
Tanium exposed customer data during a demonstration of its software last month, according to an earlier Wall Street Journal report. Around the same time Bloomberg reported an exodus of senior officials because of CEO Orion Hindawi’s “bullying management style.”
Private equity firm TPG Growth led Tanium’s funding round, which included other existing investors IVP and Andreessen Horowitz. The company was valued at $3.65 billion before the round; Tanium said the round raised its value to $3.75 billion.
The company used some of the proceeds to repurchase shares from Tanium executive chairman David Hindawi, who co-founded the startup with his son Orion. The funding will “enable him to fund his charitable endeavors, which are focused on early education and giving disadvantaged children a healthy start to life,” according to a statement. The rest of the money “will be used to provide liquidity to early employees and early investors and for general corporate purposes.”
Orion Hindawi told the Wall Street Journal the intent of the sale “is as we march toward our strategic goals, we want to make sure we’re taking care of our employees and giving them the option for liquidity over time so they’re not starving—waiting for this big feast to happen at the IPO.”
Tanium would not answer SDxCentral’s questions about the funding round, its planned IPO, and negative media reports. A spokesperson directed SDxCentral to a blog post by Orion Hindawi, which he called an open letter to customers.
Not a Toxic Culture
In the post, Hindawi addressed the reports that the company exposed data belonging to El Camino Hospital in Santa Clara, California. The community hospital said it “did not authorize desktop management data or other information to be used in any product demonstration and was not previously aware of these demonstrations or videos.”
“We take responsibility for mistakes in the use of this particular customer’s demo environment,” Hindawi wrote in the blog. “We should have done better anonymizing that customer’s data. Viewers didn’t connect the demo environment to that customer for years, and we do not believe we ever put our customer at risk with the data we showed. Looking at those demos, we see there are easy things we should have done to obscure and anonymize further.”
He also indirectly addressed the Bloomberg report, which said nine senior executives had left Tanium and alleged Hindawi fired workers before they could cash in their stock options and ridiculed employees in front of colleagues.
“It is true that I personally can be hard-edged, and that I’ve had to apologize to people at Tanium when I’ve gotten too sharp at times,” Hindawi wrote. “What is not true is that we have a toxic culture.”
He denied bullying employees and firing workers to save “a few shares of stock.”
Hindawi told the Financial Times that the media reports did not hurt business. “I spent most of my time in the weeks following those articles calling customers. I spoke personally to about 150 chief information officers and chief information security officers,” he said, adding that not one customer left Tanium.