Startup Guardicore Raises $60M To Take On VMware NSX, Cisco ACI

Customers moving to the cloud tend to prefer a platform-agnostic offering like Guardicore rather than VMware NSX which locks users into vSphere or Cisco ACI which locks users into an on-premise physical environment, CEO Pavel Gurvich said.

Guardicore has raised an additional $60 million to better position the cloud and data center security startup to compete against Cisco ACI and VMware NSX.

The Tel Aviv, Israel-based cybersecurity vendor plans to use the proceeds from its Series C round on everything from product development to marketing initiatives to partner program enhancements, according to co-founder and CEO Pavel Gurvich. The funding will enable Guardicore to drive more brand awareness, Gurvich said, giving the company a leg up when selling against Cisco or VMware.

"We're growing as a company. Our customer base is growing, and we want to accelerate that," Gurvich told CRN. "It's really about scale at this point."

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The Guardicore micro-segmentation control offering faces an uphill battle against Cisco ACI and VMware NSX, but Gurvich said the company benefits from providing a superior customer experience and more generous opportunity for partners. Guardicore partners qualify for discounts ranging from 25 percent for entry-level authorized partners to 30 percent for silver tier partners to 40 percent for gold partners.

Customers moving to the cloud tend to prefer a platform-agnostic offering like Guardicore rather than VMware NSX which locks users into vSphere or Cisco ACI which locks users into an on-premise physical environment, Gurvich said. Plus segmentation with Guardicore is simple and intuitive thanks to a completely open distributed software base and great graphical user experience, according to Gurvich.

Other tools force customers to spend a lot of time segmenting one application from another, which Gurvich said results in downtime and mandatory changes to the physical infrastructure. But Guardicore's offering is a simple-to-deploy overlay that can go to the cloud, stay on-premise, do both at the same time, and work with containers, according to Gurvich.

"They [NSX and ACI] both limit you," Gurvich said. "And both are difficult products to roll out."

VMware didn't immediately respond to a request for comment, while Cisco wasn't immediately available for comment.

Guardicore's Series C round was led by new investor Qumra Capital, bringing the company's total funding to $110 million since being founded in 2013. The company has tripled its revenue for each of the past three years, Gurvich said, and hopes to pull off the feat again both this year and next.

The company has nearly 150 employees today, and Gurvich hopes to double Guardicore's headcount over the next year through significant hiring to the company's sales, marketing, post-sales implementation, and research and development teams. The company currently has approximately 60 reseller partners, Gurvich said, as well as a handful of MSSP partners.

From a channel perspective, Gurvich said Guardicore is most focused on growing its service provider ecosystem by recruiting and training more MSSPs. The additional funding will allow Guardicore to stay more aligned with MSSPs from a pricing structure and payment terms perspective, which Gurvich said is important since MSSP typically have a much shorter billing cycle than Guardicore itself.

Guardicore also plans to use the money to enhance its deal registration portal to include more content and online training materials, according to Gurvich. And from a marketing standpoint, Gurvich said Guardicore would like to do more with events and digital campaigns, and deploy more capital into 'quick start' campaigns to help new solution providers get up to speed.

Arbala Systems would like to see Guardicore use the Series C proceeds to create more marketing collateral, specifically as it relates to business use cases and calculators around what customers can expect from a return on investment and time to market standalone, according to Michael Henry, CEO of the Dallas-based solution provider.

Highlighting specific use cases such as financial services organizations going through digital transformation would make it easier for customers to understand the value of Guardicore and make the conversation a less technical one, Henry said. Arbala became a Guardicore partner nine months ago to help customers gain better visibility into and control over complicated networks, according to Henry.

"It's definitely been the star in our portfolio," Henry said. "And we're just getting started."