Seven-year-old Zscaler has accepted relatively little outside money compared to other security startups, but big companies like Dollar General, Hormel Foods, La-Z-Boy, Nestle and United Airlines rely on its cloud services to fight cyberthreats.
This week the security startup hired a CFO with public company experience to prepare for an initial public offering.
Sydney Carey, who spent nine years with TIBCO Software, most recently was at open source database startup MongoDB. A month ago, Zscaler also added a global vice president of sales, former Hewlett-Packard and Symantec executive William Welch.
Strategic investors include Lightspeed Venture Partners, which was part of a $38 million round in August 2012. The company’s founder “resisted” earlier financing. “This is a mature startup that is on the path to IPO,” Carey said, without being specific about timing. “If we had taken later-stage money, we would be around the billion-dollar mark.”
Zscaler founder and CEO Jay Chaudhry has already built and sold five companies in the security space, including AirDefense (bought by Motorola) and CipherTrust (Secure Computing). The idea for his latest venture came from this simple thesis: “If applications are moving to the cloud, security should move to the cloud, too.”
Zscaler’s service typically replaces dedicated firewall and gateways that filter corporate Internet traffic for potential threats, often slowing things down in the process. For example, the U.K.’s National Health Service replaced eight racks full of security equipment when it became a Zscaler customer, speeding response time for its 1.6 million employees in the process, Chaudhry said. “Our business helps them deliver clean pipes,” he said.
During its second quarter ended Jan. 31, Zscaler booked its largest deal yet: a subscription worth almost $10 million sold to a “Global 100 consumer goods” business. At last count, the security startup served approximately 5,000 customers.
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