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Google Chairman, Salesforce Chairman Pump their Cash into Cybersecurity Startups

By July 21, 2015Article

A who’s who list of tech industry top guns are also cybersecurity investors. 

We recently reported that Microsoft’s Chairman, John Thompson, and NetSuite’s CEO, Zach Nelson, invested alongside a couple of VC firms in a $2.7 million seed round raised by cybersecurity startup Phantom Cyber. 

Who else is in? 

Google’s Schmidt. 

Illusive networks (Tel-Aviv, Israel) raised $5 million in Series A funding from cybersecurity think tank Team 8, which is a partner with Innovation Endeavors, the VC firm founded by Google Chairman Eric Schmidt. 

Salesforce.com’s Benioff. 

HackerOne (San Francisco, Calif.), the vulnerability management and bug bounty platform announced a Series B financing of $25 million led by New Enterprise Associates (NEA). The round includes participation from existing investors including Benchmark as well as numerous angel investors including Salesforce Chairman and CEO Marc Benioff, among others. 

Corporate investing and M&A activity 

Google and Salesforce.com are interesting players in the cybersecurity space. While neither is a pure-play cyber firm, they are both making waves in the security space. It is quite interesting that these chairmen oversee their firm’s corporate M&A and investment activities while simultaneously plunking down their own money – in the same sector. Consider: 

  • Google Ventures (the venture arm of Google) is well known as a top-10 cybersecurity investor. Intel and Google are the top two corporate investors in the cybersecurity industry.
  • CrowdStrike Inc. (Irvine, Calif.), provider of the first true Software-as-a Service (SaaS)-based next-generation endpoint protection platform, recently announced that the company has completed a $100 million Series C financing round, led by Google Capital. Rackspace, a CrowdStrike customer, also participated in the round along with existing investors Accel and Warburg Pincus. This brings the company’s total funding raised to $156 million.
  • Salesforce bolstered its mobile security when it recently acquired Toopher, a four-year-old two-factor authentication startup out of Texas. Although terms of the deal were not disclosed, Business Insider reported that Salesforce granted a total of 37,408 shares to Toopher’s seven employees – worth approximately $2.5 million at the time. 

That’s not the first time Salesforce has enhanced its platform by acquiring a security company. Back in 2011, Forbes reported that Salesforce acquired Navajo Systems, a cloud security company, for approximately $30 million. 

Google has an impressive and longstanding history of acquiring security technology and talent via acquisitions. 

If Salesforce or Google were to go down 

A recent report by Bessemer Venture Partners (BVP), a multinational $4 billion venture capital firm, taps cybersecurity as one of three areas within cloud as particularly high growth. Referring to the importance of securing cloud applications – and the potential staggering market impact of not securing them – BVP stated, “If Salesforce went down for two days, the whole industry would lose 20 percent off its valuations.” 

Imagine if the Google website or one of its public-facing apps like Gmail went down for two days. Talk about a cyber earthquake – that would be like a 9.5 on the Richter scale. 

Good thing these companies are baking security into their platforms! 

Stay tuned for a HOT cybersecurity deal watch coming next week …. 

Steve Morgan is founder and CEO at Cybersecurity Ventures and editor-in-chief of the Cybersecurity Market Report and the Cybersecurity 500 list of the world’s hottest and most innovative cybersecurity companies. Follow Steve on Twitter or connect with him on LinkedIn.