Cloud security company Netskope is planning to accelerate its growth plans in Latin American markets following an oversubscribed $300 million round that boosted its market value to $7.5 billion.
Focused on cloud-based Secure Access Service Edge (SASE) technologies, the firm is taking the next step of its strategy following the investment announced last week led by ICONIQ Growth and joined by a pool of existing backers including São Paulo-based venture firm Base Partners, as well as Lightspeed Venture Partners, Sequoia Capital Global Equities, Accel, Geodesic Capital and Sapphire Ventures.
With a portfolio of over 1,500 global clients, the software firm claims to serve most of the world’s largest healthcare and telecommunications companies, as well as major global retailers and commercial banks. The company operates in a fast-expanding segment: according to analyst firm Gartner, by 2024, 30% of enterprises will adopt cloud-delivered security services, up from less than 5% in 2020.
According to the company’s CEO and co-founder Sanjay Beri, the fresh capital will go towards the enhancement of the company’s SASE product and virtual security platform, as well as broadening Netskope’s footprint in regions such as Latin America.
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“We have been rapidly expanding in Latin markets over the past two years and invested millions and millions of dollars in the region. We believe very strongly in the local market and will continue to agressively expand teams, infrastructure and our partner [network]”, Beri said.
The Netskope user base in Latin America has increased 220% in the past 18 months, the company noted. To meet the demand, the company launched datacenters in São Paulo, Buenos Aires, Santiago and Bogota, and expanded operations in Brazil and Mexico with new offices in Monterrey and Brasília. Clients in the region include ten of the largest financial institutions, the firm said, as well as three of the five largest telecommunications providers, and three of the five most significant Latin retailers.
Over the last few months, Latin markets such as Brazil witnessed the emergence of some of the most significant cybersecurity incidents on record. In January, the largest data leakage in Brazilian history became known, with sensitive data from 223 Brazilians including deceased individuals exposed. A couple of months earlier, the Brazilian Superior Electoral Court suffered the most severe cyberattack ever orchestrated against a public sector institution in the country.
More than half of Brazilian companies frequently suffer cyberattacks, according to research published in June by polling firm Datafolha commissioned by Mastercard. In a context where rising cybersecurity concerns coexist with imperatives around digital transformation, remote working and ramping up cloud – nearly three quarters of Latin companies will adopt the off-premises model in 2021, according to analyst firm IDC – the scope of opportunities is vast, Beri noted.
“[Companies] in Latin America have told me the attackers know where their sensitive data is better than they do. So we partner with them to find out where that data is, protect it and enable the company to continue to work remotely and digitally transform”, the executive said, adding the subject has become particularly relevant in Brazil given the introduction of the general data protection regulations, which have been introduced in September 2020 with sanctions applicable from next month.
From a broader business perspective, Beri will be working towards his goal of building “the most impactful cybersecurity company in the world”. The executive noted this is the firm’s last private investment round and that an IPO is well on the horizon.
“The reality is that we could go public today, however we don’t need to do that for capital reasons. Our brand awareness has been growing increasingly, but it is our path to be a public company in the future”, said the entrepreneur, adding he is yet to decide whether to list on Nasdaq or NYSE: “It will be whoever has the largest implementation of Netskope”.