Goldman Sachs leads a $90M investment in data security startup Fortanix to help enterprises protect their sensitive data
Every year, businesses in nearly every sector have become victims of data breaches. The cost of a data breach continues to skyrocket. According to a recent IBM study conducted by the Ponemon Institute, data breaches cost American companies on average more than $8 million per incident, with big breaches (more than 50 million records) costing $388 million.
At the same time, organizations and businesses have responded to these attacks by building stronger, resilient, and more secure infrastructure. But clearly, that hasn’t been enough as we saw with the case on May 31, 2017, when hackers breached the security infrastructure of OneLogin, a company that was supposed to secure organizations’ data. More than 2,000 businesses later learned the hard way that hackers spent seven hours perusing OneLogin’s customer data.
The incident with OneLogin is not uncommon. It further shows the current approaches to data security don’t cut it. As such, we need a fundamentally different approach. And that’s exactly what this Silicon Valley is aiming to do.
Enter Fortanix, a data security startup that provides a data-first approach to help businesses of all sizes modernize their security solutions on-premises, in the cloud, and everywhere in between.
Today, Fortanix announced it has raised $90 million in Series C financing led by the Growth Equity business within Goldman Sachs Asset Management (Goldman Sachs). The round, which brings the company’s total funding to over $122 million, also saw participation from GiantLeap Capital as well as the existing investors Foundation Capital, Intel Capital, Neotribe Ventures, and In-Q-Tel. Soumya Rajamani, Vice President at Goldman Sachs, will join Fortanix’s board of directors.
Founded in 2016 by Ambuj Kumar and Anand Kashyap, Fortanix is a multi-cloud security company that delivers security solutions for digital assets using runtime encryption.
The funding builds upon the significant and sustained growth Fortanix has experienced despite the pandemic and the recent macroeconomic conditions. The company has gained customers across multiple verticals including some of the highly regulated industries. Traditional network security-led approaches have not been entirely successful in preventing data breaches and ransomware.
Regulatory requirements have increased as have penalty amounts. The data-first approach to security advocated by Fortanix tackles this problem head-on by decoupling security from infrastructure, and provides an elegant way to secure data, wherever it is. It further allows organizations to credibly conform to privacy laws and regulatory requirements globally including GDPR, Schrems II, HIPAA, PCI, ITAR, and several others.
“We constantly look for companies with disruptive technologies and have seen the benefits of its data-first approach,” said Soumya Rajamani, Vice President at Goldman Sachs. “Many businesses can relate to the challenge of data security and privacy, and we are proud to support the Fortanix team in their mission to solve security and privacy.”
Fortanix’s innovative approach, backed by more than 25 patents, has resonated in the market. The company counts dozens of Fortune 500 companies as its customers, as well as several U.S. government agencies. The company experienced more than 500% growth over the past three years, placing it in the top quarter of the annual Inc. 5000 list of the fastest-growing private companies in America for 2022.
“I am grateful to the new and existing investors for their confidence in the Fortanix team and our technology, and I am thrilled to welcome Soumya Rajamani to our board of directors,” said Ambuj Kumar, CEO and co-founder of Fortanix. “Cybersecurity is one of the most important needs of our current era. This fundraise is a strong validation of the massive market opportunity ahead as we execute our bold mission.”