Network and cybersecurity firm Versa today announced that it has raised $120 million in a mix of equity and debt led by BlackRock with participation from Silicon Valley Bank. CEO Kelly Ahuja told TechCrunch that the proceeds, which brought Versa’s total capital to $316 million, will be used for marketing efforts and growing the company. He complained when asked how much equity in finance he had with debt.
Versa’s big round suggests that despite the market slowdown, VCs haven’t yet lost faith in cybersecurity providers. According to data from PitchBook, venture capital investments this year reached $13.66 billion, compared to $11.47 billion in 2020 (although down from $26.52 billion in 2021).
It helps these vendors keep customers — or at least potential customers — driving. A December 2021 survey by CSO found that 44 percent of security leaders at large companies expect their budgets to increase in the next 12 months. And Gartner projects that spending on information security and risk management will total $172 billion in 2022, up from $155 billion in 2021 and $137 billion a year ago.
“The pandemic has seen enterprises accelerate their transition to the cloud and fully distribute their workforce. This has dramatically increased cybersecurity issues – leading businesses to look for new ways to protect and connect their users, networks and applications,” Ahuja told TechCrush in an email interview.
Two brothers, Apurva Mehta and Kumar Mehta, co-founded Versa in 2012. They came from Juniper Networks, where Apurva Mehta was the Chief Architect of the Mobility Business Unit and Kumar Mehta was the VP of Engineering.
Kelly Ahuja, a Cisco alumnus, became Versa’s CEO in 2016.
Versa offers a wide range of subscription-based software services – too many to list here – but positions itself as a Secure Access Service Edge (SASE) provider. As defined by Gartner in 2019, SASE combines software-based wide area networking and security principles such as zero trust into a single service model.
Through partnerships with service providers, Versa connects users to applications in the cloud or data centers with security protection on top – such as data loss prevention devices and gateways. In essence, the company offers a hardware-agnostic software stack that provides a single interface — in the cloud, on-premises, or both — to implement enterprise security and network policies.
“The Versa portfolio in SASE connects security and networking,” Ahuja said, noting that Versa has a “huge” team working on machine learning and AI-based malware detection. “Versa has developed a unique platform that combines AI and machine learning-powered security service edge and software-defined WAN (SD-WAN) solutions to help customers reduce cybersecurity risk.”
When asked about current customers, Ahuja said 625 Workforce Versa solutions are deployed by “tens of thousands” of enterprises worldwide. He declined to disclose revenue figures, instead pointing to San Jose-based Versa’s annual contract value, which has grown 60 percent in the “last few years.”
“Every industry and business is facing the same macro challenges – high inflation, recession and supply chain and geopolitical challenges,” Ahuja said. “[But] Versa delivers a clear value proposition and ROI of reducing cybersecurity risk.
Covering Versa’s final funding round in June 2021, CRN’s Gina Narci noted that the SD-WAN and SASE space has seen significant consolidation in recent years. Cisco Systems acquired Viptela and VMware bought SD-WAN provider VeloCloud, and more recently Palo Alto Networks acquired CloudGenix while snapping up HPE’s Aruba Silver Peak.
Last year, Ahuja told Fierce Telecom’s Linda Hardesty that she wasn’t buying a Versa herself. Plans haven’t changed, he says — Ahuja sees the latest financing as setting the firm on the path to an initial public offering.
