Endpoint Security , Next-Generation Technologies & Secure Development , Security Operations

Axonius Raises $200M, Aims to Guard More Asset Types Via M&A

A startup led by an Israeli military intelligence veteran hauled in $200 million to pursue acquisitions that will allow for the protection of more asset types.

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The Series E extension funding will allow New York-based Axonius to better use existing data around customer environments and build on its recent expansion to safeguard SaaS applications and installed software through either organic or inorganic investments, according to CEO Dean Sysman. Deals would either cover additional asset types or help clients extract more value from the platform, he said.

"One of the things that we'd love to do is look at inorganic growth and look at acquisitions in the market," Sysman told Information Security Media Group. "We have never done an acquisition before. It's definitely something that we're considering and something that is very valuable for our customer base if we find the right one."

The latest funding comes two years after Axonius completed a $200 million Series E funding round led by Accel at a $2.6 billion valuation. Sysman said Axonius maintained that valuation despite the economic downturn and sharp decline in multiples thanks to meaningful declines in the company's net spend and rapid annual recurring revenue growth, which went from $1 million to $100 million in under five years (see: Dean Sysman on How Axonius Does Asset Management Differently).

Acquiring Defenses for Additional Asset Types

The Series E extension round was led by Accel and Lightspeed Venture Partners, which Sysman praised for their track record backing highly successful companies in both cybersecurity and enterprise software. Accel first began backing Axonius with the initial Series E round in March 2022, and Lightspeed led the company's Series C round in March 2020 before participating in Series D and E rounds in 2021 and 2022.

"We wanted to show the market how well we're doing," said Sysman, who spent more than five years in Israel's Unit 8200 and rose to the rank of captain. "We're such a strong company, even in a tough market."

Sysman said the money will allow Axonius to give customers visibility into asset types not covered today, understand existing asset types more deeply and better operationalize and automate certain assets. The company wants to capitalize on its understanding of which apps, data and devices a user can access as well as Axonius' understanding of app vulnerabilities and user permissions to better protect companies.

"We have never done an acquisition before."
– Dean Sysman, co-founder and CEO, Axonius

By expanding the types of assets covered and the depth of information available, Axonius aims to empower security and IT teams to better manage their digital infrastructure, improve incident resolution, and execute projects and processes more efficiently, according to Sysman.

Is an IPO in Axonius' Future?

Axonius does the vast majority of its business in North America today, but Sysman said the company wants to become a truly global presence by boosting its brand awareness and recognition. The company today works with customers ranging from businesses with a couple hundred employees to Fortune 500 organizations and federal agencies with hundreds of thousands of employees, according to Sysman.

While Axonius is open to additional rounds of private funding based on the state of the public markets, Sysman believes eventually pursuing an initial public offering is essential to Axonius becoming a foundational solution for a universal problem. "We have the potential to be one of the largest software companies in the world," Sysman said.

From a metrics standpoint, Sysman said, he's laser focused on customer acquisition cost, or how many months it takes for Axonius to recoup the cost of acquiring a new customer. Axonius is also closely monitoring its net spend to ensure the company remains on the path to profitability, as well as its growth rate relative to other public or late-stage private companies in the same market, Sysman said.

"Our grand vision was to become the system of record for everything in the digital infrastructure - be the one place where you find the full context of everything your organization knows about any kind of asset in your digital infrastructure, and even the relationships between them," Sysman said.