Cloud Security Firm Aqua Security Raises $135M To Add Clients

Aqua Security plans to use the Series E proceeds to keep improving its product, acquiring additional customers, and educating the market about cloud-native security as it prepares for an IPO in a few years.

Aqua Security has closed its Series E funding round and notched a $1 billion valuation to scale from 410 customers today to thousands of customers within a few years.

The Ramat Gan, Israel-based cloud security startup said it needs to keep improving its product, acquiring additional customers, and educating the market about cloud-native security to carry out an initial public offering in a couple of years, according to co-founder and CEO Dror Davidoff. Aqua’s $135 million round was led by new investor ION Crossover Partners, and brings the company’s total funding to $265 million.

“We proved we have the best product in the market,” Davidoff told CRN. “Now we need to scale up our operations to take advantage of the opportunity.”

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Aqua wants to grow its share of customers outside North America from 20 percent today to 40 percent within the next couple of years, Davidoff said. Europe had historically been a little slower and more cautious when it came to cloud adoption, but Davidoff has recently seen a transformation where leading European organizations are willing to go big on cloud technology.

Asia-Pacific, meanwhile, hasn’t historically received much investment from Aqua, but Davidoff said the company is starting to bring more focus to its efforts to take advantage of the huge opportunity in the region. Aqua plans to grow its workforce from 300 people today to 450 people by late 2021, with new hires focused on sales and marketing as well as standing up an engineering center in the Eastern U.S.

From a customer size standpoint, Davidoff said Aqua has traditionally done best with larger-scale enterprises who have expertise around new technology, knowledge of how to secure them, and are looking for serious and advanced security offerings.

But Davidoff said Aqua now has open-source products that are more appropriate for companies earlier in their cloud journey to address challenges around hygiene, identifying vulnerabilities, and hardening their environment. Mid-tier and smaller companies tend to be less diversified with cloud services and technologies, and he said Aqua is better positioned to serve companies at different maturity levels.

Aqua historically has been the strongest in the financial, retail, media and defense verticals, and found that financial firms were early adopters of the company’s technology due to the level of regulation they face, Davidoff said. More recently, Davidoff said software and IoT vendors have turned for Aqua, while automotive vendors seek assistance securing the exponential amount of software they’re developing.

From a technology standpoint, Davidoff said Aqua has significant plans to enhance its Kubernetes security offering to address evolving security requirements around the technology. The company also plans to make big investments around enhancing the security around cloud infrastructure as infrastructure as code (IaC) becomes more of a standard across the industry, according to Davidoff.

And going forward, Davidoff anticipates there will be additional run-time technologies Aqua will need to secure as new types of workloads emerge beyond containers, serverless and lightweight virtual machines. All told, Davidoff hopes Aqua’s funding will drive more customer acquisition, better coverage of cloud security problems, and more use of the company’s technology by the open source community.

“Anyone that’s running in the cloud needs to get good security in place,” Davidoff said.