Facebook Security Chief’s Favorite Cyber Tool Raises $70 Million and Becomes a Unicorn
Duo Security, an Ann Arbor, Mich.-based cybersecurity company, has closed a new round of fundraising worth $70 million at a valuation of $1.17 billion that includes the capital raised, the company said Wednesday.
The latest cash injection elevates Duo into the rarified ranks of the so-called unicorn club, a collection of prized startups privately valued at a billion dollars or more. Other cybersecurity firms that have sprouted unicorn horns include Tanium ($3.75 billion valuation, according to the latest Pitchbook data), Illumio ($1.18 billion), and CrowdStrike ($1.02 billion).
Duo has raised a total of $119 million in venture capital funding to date.
Alex Stamos, Facebook’s (FB) chief security officer and a 2015 honoree on Fortune’s 40 Under 40 list, recently called out Duo’s product as his favorite tool made by an information security company. “Best product I use is @duosec,” he wrote in a post on Twitter last month.
Duo supplies companies with so-called access management tech, which includes two-factor authentication and single-sign on services. The company competes with Okta, which went public earlier this year, and Ping Identity, which private equity firm Vista Equity Partners scooped up a year ago.
“Attackers aren’t going after systems anymore, they’re going after users,” Dug Song, CEO of Duo, told Fortune. Prior to cofounding Duo in 2010, Song served as chief architect at Barracuda Networks and as chief security architect at Arbor Networks.
Duo took in $73 million in revenue last year, more than double the $31 million it brought in the year prior, the company disclosed in February. The firm has grown at a breakneck pace: in 2015 Duo garnered $10 million in revenue.
Duo counts companies such as Yelp (YELP), Etsy (ETSY), and Walmart’s (WMT) Jet among its customers, according to its website. The company recently partnered with Microsoft to integrate its technology within the Azure cloud offering’s active directory, which handles identity and access management.
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Venture capital firms Meritech Capital Partners and Lead Edge Capital led the new fundraising round. Also joining were new investors Geodesic Capital, Index Ventures, and Workday (WDAY), as well as existing investors Redpoint Ventures and True Ventures.
Duo now has more than 500 employees, CEO Song said. Asked whether he was interested in eventually going public or being acquired, he replied “nothing is off the table.”