Another unicorn has been marked up in the cybersecurity industry with a significant funding round. Kiteworks, a company specialising in building tools to secure email communications, file sharing, and sensitive data situations, has successfully raised an impressive $456 million from Insight Partners and Sixth Street Growth. The company’s valuation exceeds $1 billion.
This is a significant milestone for the San Mateo-based startup, previously known as Accellion, as it faced a significant data breach in 2021. The incident, which involved legacy services, had a significant impact on over 300 organisations, including major players like Morgan Stanley, the University of California, Kroger, and Shell.
Kiteworks work over past two years
Today, Kiteworks is thriving with a track record of profitability for the past two years. Its impressive suite of tools caters to over 100 million end users and is trusted by more than 3,650 global enterprises and government agencies. 
This investment arrives during a period of persistent IT breaches that continue to trouble users and organisations. However, the current funding landscape for startups continues to present significant challenges.
This has led to successful cybersecurity companies emerging as consolidators. Earlier this year, Wiz secured a substantial $1 billion in funding to acquire smaller companies, and Kiteworks has expressed similar intentions.
Kiteworks announced its plans to utilise the funds for strategic acquisitions.
“We have a rather ambitious M&A strategy that we initiated approximately a year-and-a-half to two years ago,” stated Tim Freestone, the chief strategy officer, during an interview. By securing the necessary funds, we can ensure the seamless continuation of our strategy for the next four years.
Kiteworks has successfully acquired four smaller enterprise startups since 2022. In addition, funds will be allocated towards hiring, research and development, and business development, according to his statement.
There has been a significant surge in startups within the cybersecurity industry. This is due to the ever-changing nature of threats, which motivates ambitious technologists to seize these opportunities. Perhaps, Kiteworks offers a different perspective on the cybersecurity narrative.
With over 20 years of experience, the company has established itself as a well-established privately-held operation, making it distinct from a traditional startup.
While many have been fixated on topics such as cloud, network/infrastructure, and application security, Kiteworks has directed its efforts towards safeguarding data. Their primary concern is ensuring the security of sensitive information, regardless of its location – whether it’s on-premises, in the cloud, or even a piece of data entered on a web form.
“We have made significant progress as an industry by reaching the data layer,” Freestone stated.
Kiteworks has distinguished itself by adopting a specialised method for managing sensitive data known as a private content network, or PCN (distinct from the other PCN in infosecurity, which refers to process control network). For government organisations, or those looking to provide services to them, it is crucial to maintain a robust level of data protection compliance.
According to Kiteworks, they are the exclusive security platform authorised by FedRAMP in the U.S. They offer assistance for various tasks such as file sharing, file transfer, and email communications to ensure compliance with the necessary requirements. One of its solutions showcases creativity: a DRM tool that cleverly presents a document as the genuine article to the recipient, while actually being a replica. This guarantees that the majority of data remains within the sender’s secure firewall.
Jonathan Yaron, the CEO and chairman of Kiteworks, emphasised the significance of this investment in addressing the complex task of handling sensitive data. “We are excited to drive our growth forward and constantly innovate to meet the ever-changing demands of our customers.”
Insight Partners and Sixth Street Growth are collaborating to invest in the company with a combination of primary and secondary shares. The company has chosen not to reveal the breakdown between primary and secondary proportions. However, according to PitchBook data from early July, the initial portion of the overall amount, known as growth capital, amounted to $228 million.
With over $4.5 billion invested in cybersecurity, including Wiz, Insight sees this as the perfect time for Kiteworks to make a bold move.
“Given the increasing number of cybersecurity threats from third parties and the need to comply with strict regulations, Kiteworks has a significant market potential for both organic and inorganic expansion,” stated Eoin Duane, MD of Insight, in an email to Eltrys. The Kiteworks PCN has gained significant popularity among customers, with a strong growth rate within its existing customer base. With the increasing importance of data security, the company is in a favourable position to attract new customers.
