Editor’s note: This article is part of a multimedia series called “Tomorrow’s Unicorns: A look inside Raleigh’s $1B startup pipeline,” produced in conjunction with Innovate Raleigh. The series aims to spotlight some of the region’s homegrown startups tipped to hit the $1-billion valuation mark, thus becoming a so-called “unicorn” in the language of investors, in the near future.
MORRISVILLE – Back in the early 2000s, Erkang Zheng was a recent NC State grad, working for a couple of startups.
As he recalls, it was a challenging time to be a startup on the East coast raising money.
Today, it’s a drastically different story.
Over the last 13 months since launching, he’s raised a whopping $49 million for his cyber asset management startup, JupiterOne. (A $30M Series B funding round in May 2021 (led by Sapphire Ventures) and $19 million in Series A funding announced in September 2020).
He says the Morrisville-based startup has tripled its annual revenue and more than doubled its team. It’s also added strategic investors, Cisco Investments and Splunk Ventures, alongside Atlassian CTO Sri Viswanath and Netflix VP Jason Chan. It has clients in Reddit, Databricks, and Auth0.
“It’s the right product at the right time,” Zheng says. “The sky is the limit.”
Even $1-billion status?
“I don’t know about the timing,” he tells TechWire from JupiterOne’s sprawling new headquarters in Morrisville’s Aerial Center Parkway, “but I can certainly see that.”
A large part of what’s fueling that growth is the spike in recent cyberattacks around the globe.
The COVID-19 pandemic has accelerated technological adoption, he says, but it has also exposed cyber vulnerabilities and unpreparedness.
Between 2019 and 2020, ransomware attacks rose by 62 percent worldwide, and by 158 percent in North America alone, according to cybersecurity firm SonicWall’s 2021 report. The FBI received nearly 2,500 ransomware complaints in 2020, up about 20 percent from 2019, according to its annual Internet Crime Report. The collective cost of the ransomware attacks reported to the bureau in 2020 amounted to roughly $29.1 million, up more than 200 percent from just $8.9 million the year before.
As recent weeks demonstrate, the Triangle isn’t immune. When Raleigh-based communications provider Bandwidth got hit in late September, it triggered network outages and stocks tumbling to a 52-week low.
Zheng warns, it’s only going to get more complicated.
“Companies are transforming key areas of their business and are more digital and software defined. It just becomes increasingly difficult for security teams to keep up,” he says. “Because of that there are more gaps and unknown issues that happen.”
Security as a basic right
The global security and vulnerability management is a segment that is forecast to grow from $13.8 billion to $18.7 billion by 2026. Among the driving factors is the increase in vulnerabilities across the globe, say analysts.
JupiterOne’s tagline is “know more, fear less.” A business is constantly evolving and adding new cyber assets (CSP accounts, source control systems, systems, endpoint agents, vulnerability scanners).
Its cloud-native platform helps companies manage their IT assets by centralizing its data into a single hub to analyze in a dashboard. Users can visualize, review and update asset relationships.
“It’s kind of like DNA sequencing for an organization,” Zheng explains. “But instead, we build a graph knowledge base for cybersecurity.”
Part of JupiterOne’s central mission is the belief that security is a basic right.
Zheng: “Whether you’re a 10-person startup or a Fortune500 company, you need the right security product and visibility to do business securely. We built a platform that can support both ends.”
JupiterOne offers a free-tier plan alongside products aimed at enterprises building out their cyber security programs. Just this week, it launched a free eBook, offering “roadmaps” to cybersecurity programs.
That mission started more than 20 years ago. After graduating from NC State, he had extensive stints at IBM and Fidelity Investments, heading up their cybersecurity programs.
Then in 2017, he got the call to work for Indiana-based healthcare software startup called LifeOmic.
“At the time, I was kind of struggling a bit,” he recalls. “I remember thinking, why would I leave my fast-growing team of 50 people to join a startup and be a team of one again? To top it off, they weren’t even based here.”
In the end, however, he went for it because it meant he could build a security program from scratch without the legacy of an established company. “I could restart and rebuild a security program the right way, without any baggage. Everybody was moving into the cloud, and things needed to be done differently. I saw that as an opportunity.”
Zheng served as LifeOmi’s chief information security officer, initially building the platform as a prototype to support LifeOmic’s security and compliance needs.
Eventually, he created a subsidiary company, incubated it there, and then spun it out when the time was right in 2020.
This May, JupiterOne relocated to its new headquarters in Aerial Center Parkway.
Even so, Zheng says he’s already getting ready to expand the space. He’s also expecting to triple revenue and double its staff again, jumping from 75 to 150 employees over the next year. On this day in August, the office is buzzing with excitement. The team is getting ready for its first “Camp JupiterOne,” a company retreat in Blowing Rock, just a few hours drive from RTP.
“We’ve made various investments in the research and development of products, many of which are in go-to-market,” he says. “We’re ramping up our marketing and sales teams to drive visibility of our company and close deals.”
Ultimately, he’s aiming to become the region’s next breakaway hit.
“We do foresee ourselves as the next Pendo, if not bigger hopefully,” he says. (Pendo, another Raleigh-born tech startup, reached $1-billion value in 2019.)
“That’s certainly the goal. It all depends on how fast we scale on the market. There are so many different variables, but I certainly hope sooner than later.”
This editorial package was produced with funding support from Innovate Raleigh and other partners. WRAL TechWire retains full editorial control of all content.