Security Operations Firm Red Canary Raises $81M To Grow R&D

The Series C funding round led by Summit Partners will support Red Canary’s continued investment in both product and team expansion as the company works to fulfill rapidly growing customer demand.

Red Canary has closed an $81 million funding round to grow its sales and marketing teams and support continued platform expansion with new SaaS offerings.

The Denver-based security operations vendor said the Series C funding will support continued investment in both product and team expansion as Red Canary works to fulfill rapidly growing customer demand. The round was led by global growth equity investor Summit Partners, and brings Red Canary to more than $125 million of outside funding raised since being founded eight years ago.

“With a cyberattack occurring every 11 seconds, even the most well-staffed and experienced security teams are actively looking for an ally to help them stay ahead of threats,” Red Canary Co-Founder and CEO Brian Beyer said in a statement. “We will use this investment to meet the expanded demand we are seeing from security teams.”

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Red Canary currently employs 249 people, up 49 percent from 167 workers a year ago due to dramatic growth in the company’s sales and support teams. The company plans to further expand its sales and marketing teams to accelerate customer growth and reach. Red Canary has increased revenue by 270 percent over the past two years, and doubled growth in customers from channel partners last year.

The company launched Red Canary Alert Center and Red Canary Cloud Workload Protection in 2020 to extend the company’s Security Operations Platform to address endpoints, network alerts and cloud workloads. Red Canary said it plans to use the new Series C funding to build on its significant momentum by investing in research and development.

“We believe demand for MDR solutions has intensified over the last several years as it has become a strategic imperative that is fundamentally changing security outcomes for organizations,” Summit Partners Managing Director Andrew Collins said in a statement. “Red Canary continues to innovate rapidly, building on its robust product and service offering to extend protection.”

Red Canary offers SaaS threat detection and a security operations team through remotely delivered, around-the-clock SOC capabilities and technology. The company delivers the technology, process and people for organizations that do not want or need to staff on their own, or want to augment their existing teams and outsource critical security capabilities with confidence, according to Red Canary.

CISOs and the teams they lead are struggling to recruit, retain and afford the necessary security expertise to address the overwhelming volume of alerts from security infrastructure tools, Red Canary said. Due to the increasing volume and complexity of threats as well as the costly process of internal management, the managed detection and response market is slated to grow to $1.9 billion by 2024.

Red Canary’s willingness to share intelligence and methodology stood out as Antigen Security looked for security operations partners, according to Steven Legg, Co-Founder and CEO of the Holt, Mich.-based security solution provider. Legg praised Red Canary’s research as well as their ability to identify attacker activity, specific types of attacks, and specific sophisticated threat actors.

“The collective knowledge they bring consistently makes the difference in containing incidents,” Legg said in a statement provided to CRN. “Their platform gives us the chance to catch our breath in the heat of investigations, and we know they have our back while we spend our time focusing on remediation and forensic outcomes for customers.”

The managed security space has seen an infusion of outside funding over the past year. Prior to Red Canary’s funding announcement, cybersecurity managed service provider ReliaQuest landed $300 million from KKR in August 2020. Then in October, managed detection and response vendor Arctic Wolf closed a $200 million Series E round led by Viking Global Investors on a valuation of $1.3 billion.