Editor’s note: Startup Spotlight is a regular feature in WRAL TechWire that brings special attention to entrepreneurial companies across the Triangle and North Carolina.
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MORISVILLE – Demand for cybersecurity across the world is soaring in these days of ransomware and other hacker attacks. One Triangle company is fast become a pacesetter with a growing list of customers and investors. So much so that in just two years the company – JupiterOne – has become a “unicorn” with a valuation of more than $1 billion.
On Monday, it was also named the winner of three Global InfoSec Awards: “Most Comprehensive Cybersecurity Startup of the Year” and “Best Solution in SaaS/Cloud Security” from Cyber Defense Magazine (CDM), the industry’s leading electronic information security magazine. In addition, its CEO and founder Erkang Zheng was named the “Next Gen Chief Executive of the Year.”
So how did all this happen? Zheng talks with WRAL TechWire’s Chantal Allam in an exclusive interview.
- JupiterOne officially launched in 2020. In less than two years, you’ve raised more than $100 million in funds. That now means you’re now valued at more than $1 billion. In business circles, that means unicorn status. What’s your reaction?
Zheng: Whether that term “unicorn” means anything anymore is up for debate. But yes, it’s a huge deal. Two years ago, we were a tiny startup with less than 20 people and maybe in the 10s of millions of dollars. Now we have’ve go a valuation greater than a billion dollars. We’re very proud of the accomplishment.
- Do you know if it’s a record in the Triangle in terms of the timeline and speed?
Zheng: I don’t think it’s necessarily a record. Startups got crazy valuations last year because of the market. The fact that we’re able to close this amount of funding at this valuation in today’s market is very different. We are not focused on the valuation. We are very much focused on value creation for our customers and the community.
- According to reports, venture capital deployment has slumped the first quarter with rising inflation. How has JupiterOne been able to buck the trend and raise an additional $70 million in this climate.
Zheng: There’s a couple of things. We’ve had significant exponential growth in the last 12 months. We’ve also had a lot of investor interest since our last fundraiser last May. We didn’t go out and actively seek do a fundraising. It just came about because of these long-term relationship building discussions. We identified a mutually good fit. The timing was sort of impeccable. Second, it’s really the long-term potential growth. We are building a sustainable business that is here to stay. We’re not building a quick turn-around business and exiting a couple of years later. If you consider the longer term, the valuation makes sense because the potential is so much bigger. We’re looking at where are we going to be three to five years from now. We’re going to be a significant force.
- Let’s talk about that growth. Can you give me some idea of what your annual revenue looks like now? Last time we spoke less than a year ago, you said the company had tripled its revenue year over year.
Zheng: We’re not at liberty to share the actual numbers right now, but I can tell you that it is at the top 1% of the company growth rate. The rule of thumb for growth rate expectations at a successful SaaS company being managed for aggressive growth is 3x, 3x, 2x, 2x, 2x. Starting from a material baseline of over $1 million in annual recurring revenue, the business needs to triple annual revenues for two consecutive years and then double them for three consecutive years. We’re definitely going to greatly exceed that expectation. Even given current market dynamics, we still project to have very strong growth.
- What are the market conditions that are fueling this growth in cybersecurity?
Zheng: Cybersecurity has been in the spotlight and it’s not going away. We’ve been seeing a rise in data breaches and cyberattacks for years now. But on the more positive side, cybersecurity has been spearheading the digital transformation. It’s been a game-changing moment. It’s not just about security and safety. It’s also for company growth and revenue generation. Security has truly become a business enabler and a critical function across the entire business, not just IT.
- There are lots of companies working in this space. Why is JupiterOne managing to excel while others cannot?
Zheng: Cybersecurity has been around for a long time, but it’s still a relatively nascent new industry compared to others like healthcare and IT. Up until now, there have been a lot of silos and very specific use cases. But as a result of growing so quickly, and coupled with by the digital transformation and accelerated by COVID, people are now overwhelmed.
We took on a challenge two years ago that, frankly, seemed to be too big for others. A lot of startups choose to tackle something very specific. We chose to tackle a much bigger problem. JupiterOne is a data platform that enables automation and security engineering by recombining all those previously siloed data points into one place to make everything easier, more valuable, less time- consuming, and with deeper insights.
I’ve compared JupiterOne to the Google for cybersecurity, or almost like digital DNA sequencing for cybersecurity for companies. It’s a fundamental game changer and a foundational shift in advancement of technology. And we’re frankly still at the very beginning of it. What we’ve seen so far in terms of growth is just scratching the surface. There’s so much that we could be doing to continue to accelerate. We’re still educating the market on what they should do and need to do to transform.
- Are you surprised at all at how quickly this has happened? I’m sure you’ve also had your challenges, right?
Zheng: YesOh, yeah, absolutely. Externally, it looks like it’s, smooth sailing and going up and up. But in reality, like any other business, really, there are it’s a lot of ups and downs on a daily basis. There’s no such thing as a smooth ride. Did I dream or envision that this would happen? I certainly have anticipated some of this or hoped for the outcome. I’ve never really focused on the money; it’s not about that. From the beginning, it’s been about, doing the right things and solving the right pain points. We’re just continuing to do to do that to deliver value to our customers. If we just focus ondo that, everything else will naturally just kind of come to fruition.
- What do you plan to do with this latest $70 million injection of funds?
Zheng: We’re hiring both locally and remote. We’ve added 100 employees in the last year, and we’re now at 150 employees. We’ll continue to grow the company and get to over 200 employees sooner than later. We’re looking at new office space as well. We’ve already outgrown our current space, and we’ve been in it this place for just a year. We’re going to have RTP continue to be our HQ. We have employees folks all over the country place in California, Seattle, Salt Lake City, Atlanta, New York and Florida, to name a few. We’re starting to have international customers already, so all of those expansions are to be expected. It’s just a matter of time.
- How have you been able to grow and scale so quickly? How have you handled it?
Zheng: That’s twofold as well. There’s a market need for the product and the platform that we provide. It came about from my own pain points as a former practitioner and security leader. The need is even more so in today’s dynamic environment. There are a lot of silos in security landscaping and cybersecurity. Folks are looking at how to consolidate. JupiterOne is able to take advantage of that and provide business value. Security teamsFolks can leverage the platform to make their existing investments better and more efficient by using, and more efficient, by using all of these integrations and analysis. It consolidates many a lot of different use cases into a single platform that we can provide. That’s one thing that I’m very excited about. We allow the security teams to become enablers for their business and leverage different use cases to grow with us. We make them heroes and champions in their own organization.
- In November 2021, JupiterOne announced a partnership with Cisco, one of its investors, to launch a new cloud asset management tool. How much has this partnership played into your startup’s meteoric rise?
Zheng: The Cisco partnership is significant. Cisco is one of our largest customers; they use JupiterOne internally. Cisco is also a strategic investor. They came in the last round and participated in this round. Third, Cisco is our go-to-market partner. One of Cisco’s products called Secure Cloud Insights is a JupiterOne product. So they sell the JupiterOne line on their product list. All three things combined is a significant force multiplier for us, and we’re just at the beginning. I think that we’re going to see a tremendous amount of momentum throughout this year and next year. And it’s not just the Cisco partnership. Splunk is a strategic investor as well. We’re also expanding our partnerships with other key technology vendors and providers out there. There’s a lot more to it, and we certainly want to continue to amplify this through the partner ecosystem.
- How have you been able to grow and scale so quickly? How have you handled it?
Zheng: That’s the tough part. We need to continue to grow at this pace, while keeping an awesome company culture. We recently attained Great Place to Work certification, and we will continue to invest in talent and people in our employee experience. Our focus is to just do the right things for our customers and our people, both internally and externally. We’re also committed to our belief that security is a basic right. While we We’ll also continue to invest in the enterprise product, . But we also invest in open source and provide free versions of the platform. Nobody else is doing this in our space and giving back as much as we are to the community. Having this additional cash on the balance sheet will allow us to invest in those right areas.
- What’s your long-term vision? Are we looking at taking the company public anytime soon?
Zheng: That is, of course, part of the configuration. It’s still way too early to think about. Right now, we’re want to focused on execution. Even though we’re growing very quickly, we remain pragmatic and still want to take it one step at a time, one day at a time. I don’t want to put the cart before the horse, so to speak. Three to five years down the road, it could very much be a possibility but it’s not something I want to worry about right now.
- You’re an NC State grad, and a homegrown Triangle startup. What do you think your success says about the region?
Zheng: I’m excited to see the rise of the tech scene in the RTP area. It finally more feels like there’s more energy and momentum in the local area with companies like JupiterOne, Pendo and Epic Games making gains. As a local grad, I’m personally vested in the local community and rising talent. We’ve also partnered with NC State sponsoring projects. NC State also recently launched the Founders’ Pledge Program, and I’ve taken the pledge to make a gift back to the University at some point in the future. There’s a lot more partnerships that we want to do, not just with NC State but other local universities in the area as well.
