Amazon and Goldman Sachs Are Investing Millions in This Cybersecurity Startup
Ionic Security, a data protection startup based in Atlanta, said it raised $45 million in a venture capital funding from Amazon (AMZN), Goldman Sachs (GS), and hedge fund Hayman Capital on Wednesday.
The round brings the company’s total funding raised to $122 million to date. Existing investors also participated in the round, including GV (née Google (GOOG) Ventures), Icon Ventures, Kleiner Perkins Caufield & Byers, Meritech Capital Partners, and Tech Operators.
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Adam Ghetti, founder and chief executive officer of Ionic, originally conceived of the idea for the company as a kind anti-Facebook (FB), allowing him full control of the data he shared on the social network. The five-year-old startup now provides companies with tailored controls that allow employees to protect corporate and personal data through encryption and layered levels of access. (You can read more about the concept and history in this Fortune story from last year.)
Ghetti told Fortune on a call that his company has roughly doubled in size to 200 employees in the past year, adding headcount primarily in areas like product development and project management. Next up, Ghetti said he plans to “double down on engaging the external development community,” designing tools that will allow application developers to more easily build customized products and integrations using the company’s software.
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“We can throw out SDKs and say, ‘Good luck!'” Ghetti says, using a common acronym for software development kits. “Or we can do a good job supporting them.” Those relationships allow the company to gain footholds in areas and with businesses that the company doesn’t have official partnerships with, like the popular office chat app Slack.
Goldman, now an investor, was one of Ionic’s earliest customers when it began using its encryption product nearly two years ago. “We believe that Ionic’s platform addresses one of the biggest unsolved security problems for large enterprises today: how to enable employees to utilize modern communication and collaboration platforms while also maintaining adequate controls and security standards,” said Ward Waltemath, Goldman’s managing director and head of software investment, in a statement.
Amazon Web Services also struck a partnership with Ionic on top of the funding deal, integrating its offerings with the company’s cloud infrastructure. “Internet-scale, high-assurance data protection and control services are critical to the success of a cloud- and mobile-enabled ecosystem,” said Stephen Schmidt, chief information security officer at AWS. “The goal of our collaboration with Ionic is to deliver these services to any organization, at scale with provisioning, management ease and streamlined procurement via AWS Marketplace.”
Ghetti mentioned that, based on his own experience and accounts he has heard from others, “things are starting to get dicier in the fundraising environment.”
“We have never taken the highest priced term sheet offered to us,” Ghetti added. “We’ve taken the one that the investors behind term sheet are most aligned to where we are, where we’re going, and how plan to get there.”
As the once-booming cybersecurity venture capital sector cools, other entrepreneurs may not be so lucky.