Unicorn security startup Abnormal eyes IPO; crosses $100 million in annual recurring revenue
It’s been quite some time since we featured Abnormal Security, a provider of cloud email security platforms that safeguard businesses against focused email-based attacks. Back in November 2019, the San Francisco-based security startup emerged from stealth with $24 million in Series A funding led by Greylock Partners. Since then, the company has expanded its capabilities by leveraging artificial intelligence to identify potential cyber threats that may lurk within cloud-based email infrastructures.
Fast forward almost four years since our last coverage, Abnormal Security has reached a significant milestone. According to a report by Reuters, the company said today it has now exceeded $100 million in annual recurring revenue. This achievement places Abnormal Security in a noteworthy position among software companies as it eyes an eventual initial public offering
In addition, Abnormal also announced that it has hired former Forescout chief executive Michael DeCesare as its president and Maya Marcus as its chief people officer.
Founded in 2018 by CEO Evan Reiser and CTO Sanjay Jeyakumar, Abnormal Security is building a state-of-the-art data science and behavioral analysis platform, applied to email security challenges. The duo previously built large-scale machine-learning platforms at TellApart, Twitter, and Google. Abnormal Security is growing a very strong team including individuals from Twitter, Google, Amazon, and leading security companies including Palo Alto Networks, Proofpoint, FireEye, and Duo Security.
Reiser told Reuters that the company’s strategy moving forward involves ongoing product investments and preparation for its eventual transition into a publicly traded entity. This move is anticipated to align with an upturn in the market for initial public offerings (IPOs), although the exact timeline remains unspecified. Despite not yet achieving profitability, Reiser emphasized that the startup currently doesn’t require additional capital infusion.
In a noteworthy funding round that took place in May 2022, Abnormal Security secured a substantial $210 million at a valuation of $4 billion. This impressive backing came from a group of investors that included Insight Partners and Greylock Partners.
Since its inception five years ago, Abnormal Security now boasts over 1,300 customers including Domino’s, Mattel, and Xerox.
In a statement, DeCesare expressed the company’s commitment to furthering its presence in international markets, including Europe and Japan. Additionally, the company aims to engage in federal programs within the United States, specifically targeting large enterprises. Abnormal Security’s strategic focus remains centered on expansion.
“Abnormal is the AI native company in cybersecurity. Now more than ever, we need AI solutions to protect against AI threats,” said Asheem Chandna, a partner at Abnormal investor Greylock.
The company highlighted the escalating challenges its customers encounter due to a surge in cyberattacks and phishing emails. These attacks are increasingly being crafted using AI, including well-known chatbots like ChatGPT.
Meanwhile, Reiser is no stranger to startups. Before founding Abnormal Security, Evan was the founder of an online-to-offline advertising platform that used behavioral profiling to direct offline purchasing through online ads. He later sold the startup to JP Morgan in 2010.