Cybersecurity startup Abnormal Security secures $250M in funding at $5.1 billion valuation, eyes IPO

Cybersecurity startup Abnormal Security has raised $250 million in a Series D funding round that pushes the company’s valuation to $5.1 billion. The round was led by Wellington Management, with participation from existing investors Greylock Partners, Menlo Ventures, Insight Partners, and the venture arm of CrowdStrike.

Abnormal Security plans to use its new capital to enhance its human behavior AI platform, aiming to protect more users across various applications while helping customers accelerate their AI projects with autonomous solutions, according to CEO Evan Reiser.

We last covered Abnormal Security in 2019 after its stealth launch with $24 million from Greylock to protect enterprises from targeted email attacks. Since then, the startup has grown significantly and is now preparing for a public debut.

Founded in 2018 by Evan Reiser and CTO Sanjay Jeyakumar, Abnormal Security develops an advanced data science and behavioral analysis platform for email security. The founders have a background in building large-scale machine-learning platforms at TellApart, Twitter, and Google. The company boasts a strong team with members from Twitter, Google, Amazon, and top security firms like Palo Alto Networks, Proofpoint, FireEye, and Duo Security.

“This funding allows us to further invest in our human behavior AI platform to protect more people across their everyday applications, while enabling customers to accelerate their AI initiatives with autonomous AI solutions,” Reiser said.

Evan Reiser is an experienced entrepreneur. Before founding Abnormal Security, he created an online-to-offline advertising platform that used behavioral profiling to drive offline purchases through online ads. He sold this startup to JP Morgan in 2010.

Abnormal has doubled its size and surpassed $200 million in annualized revenue over the past year. The cybersecurity firm now serves more than 2,400 customers, including Maersk, Xerox, and Mattel, which accounts for about 17% of the Fortune 500.

Abnormal focuses on combating advanced email attacks, a major cybersecurity risk for corporations, along with phishing, malware, spam, and vendor fraud.

With Microsoft surpassing $20 billion in cybersecurity revenue last year, competition has increased among sector leaders like Cloudflare, Zscaler, and Palo Alto Networks. The market is also seeing consolidation, with major rivals being acquired: Avanan by Check Point Software for about $280 million in August 2021, and Area 1 Security by Cloudflare for around $162 million in February 2022.

“Abnormal is in a strong financial position, having secured our place in the market as one of the fastest-growing cyber companies of all time,” Reiser told CNBC.