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Critical Start is looking beyond itself to fuel fresh growth.
The Plano cybersecurity company raised $40 million in its first outside investment, it said in a statement on Wednesday.
The funding will help the company bolster its sales and marketing in North America and potentially Europe, according to Rob Davis, Critical Start's chief executive. In addition, there will be hiring on its software development team. The company got a valuation of $150 million, he said.
While it’s a new step for Critical Start, outside funding will help the company capitalize on overall market growth, he said. That includes demand for its key "managed detection and response" service, which helps with ingesting and investigating security alerts. At the same time, questions about dilution with outside money could be addressed, he said.
“We think we can essentially speed up the progress of the company over 12 to 18 months by this additional investment,’” he said. “Essentially, we get a smaller piece of a much bigger pie.”
Critical Start is benefitting from the persisting challenges around cybersecurity for business executives. Cybersecurity concerns, along with U.S. economic growth, are the two top drivers anticipated to spur overall U.S. tech industry growth in 2019, according to the 100 U.S. tech CFOs surveyed in a report earlier this year by BDO.
With the investment, he didn’t want to give up majority control, he said.
“I think we’ve been successful because of the culture of the company,” he said. “It was incredibly important to me to maintain control of the company, of the board, of the strategy and operations.”
The company is expanding its footprint as well, recently signing a letter of intent for about 33,000 square feet, up from about 15,000 square feet, he said. The space is near Critical Start's existing operations in Plano.
That will help with the aggressive hiring plans the company has – looking to expand from about 125 to close to 200 by the end of the year, he said.
“I look at this as an extremely important, but relatively small step,” he said, noting he has big growth plans. "I try to tell people this is not an ending but it’s a beginning. And that means the real work starts.”
Sagemount, a growth equity firm, invested with the new funding effort the announcement said. Founded in 2012, Sagemount has $1.7 billion in committed capital.