Cloud security is probably the hottest sector in private technology right now. More than $700 million has been pumped into the sector in the last few years. Zscaler is among the 23 private and public companies included in the report.
The funding round was led by TPG and included current investors EMC Corp. and Lightspeed Venture Partners. The company has raised a total of $138 million.
In addition to being focused on a red-hot issue — cloud security — Zscaler also carries the pedigree of Jay Chaudhry, the founder. Chaudhry is a serial enterpreneur who has focused on security. He’s started six companies. His biggest win so far was CipherTrust, which was acquired by Secure Computing in 2006 for nearly $300 million. It looks as if he may have already outdone that. Chaudhry also founded AirDefense, CoreHorber, Air2Web, and Secure IT.
Zscaler has more than 400 employees but will now likely add employees even faster. It sells a range of security products with a Software-as-a-Service (SaaS) model. Some of the services include a secure Web gateway, Advanced Threat Protection (APT), policy management, user authentication, data-loss prevention, application visibility, and mobile security.
The company boasts massive scale and performance for its service. Zscaler runs its own private cloud fabric, which is driven by thousands of processors and more than a terabit of bandwidth, with terabytes of information flowing in and out every day, according to the company. Zscaler guarantees 99.999% availability.
With $100 million in the bank and a $1 billion valuation, Zscaler is one of the top IPO candidates in the security space. This area has been red-hot on Wall Street, with market leaders FireEye, CyberArk, Palo Alto Networks, ProofPoint, and Qualys showing huge gains in the past year.
The Rayno Report’s analysis of the public security pure-play vendors shows they have grown from $2 billion to $4 billion in revenue in just three years, with a Compound Annual Growth Rate (CAGR) of 24%.