Brian NeSmith, cofounder of Arctic Wolf, a cybersecurity firm based in Eden Prairie, Minn., is stepping down as chief executive officer in the lead-up to a planned initial public offering in the coming months.
NeSmith, who is slated to become the company’s executive chairman, tells Fortune that Nick Schneider, Arctic Wolf’s chief revenue officer and, as of February, its president, is succeeding him in the top job. Schneider joined Arctic Wolf in June 2016 to lead the company’s sales team before rising through the ranks to join the C-suite two years later.
“We’re about three or four quarters away from going public,” NeSmith says. “Ideally, you’re not putting somebody new in the CEO slot the quarter before you go public. So, this going to let Nick put several quarters in the books and start to deal with public market investors.”
Adds Schneider: “It’s a role that I’ve been doing alongside Brian for quite some time now.”
Before joining Arctic Wolf, Schneider led sales for Code42, another Twin Cities-based cybersecurity company. Prior to that he worked for Compellent, an enterprise IT firm that went public before being acquired by Dell for $960 million in 2010.
Arctic Wolf raised $150 million last month at a $4.3 billion private valuation, upping its total funding to nearly $500 million to date. Viking Global Investors and Owl Rock, two investment firms that focus on late-stage deals, led that round.
NeSmith spent more than a decade as the CEO and president of Blue Coat Systems, a company, acquired by antivirus pioneer Symantec in 2016, best known for helping scan Internet traffic for security threats. A year after leaving that post, in 2012, he cofounded Arctic Wolf to offer a “concierge service” to small- and medium-size businesses looking to outsource their security operations centers.
Arctic Wolf, like many cybersecurity firms, has seen an uptick in demand after a slew of high-profile hacks, like the SolarWinds incident and ransomware strikes, have besieged businesses. The company has also benefited from a pandemic-spurred shift to remote work, which has presented new challenges for companies seeking to protect IT systems.
Schneider says he plans to expand globally and hire 500 people in the coming months, having already brought on 400 new hires in the past year. Even in the wake of COVID-19, he doesn’t see demand abating. “The market has shown that customers trying to do [security] themselves through a myriad of different products is probably not working,” he notes, adding that that presents an opening for Arctic Wolf to take on those security tasks.
NeSmith, who is 59 years old, tells Fortune he plans to retire “sometime in five years or so,” noting that he prefers to conduct the CEO transition sooner rather than later: “I’m not going to work till I die.”
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