Fighting hackers is big business—and just helped Blackpoint Cyber raise $190 million led by Bain Capital

Blackpoint Cyber, which helps small and midsize businesses fight off hackers, just raised $190 million in a round led by Bain Capital, they told Fortune exclusively. Accel also participated in the Series C which saw Adelphi Capital Partners, Telecom Ventures, Pelican Ventures, and WP Global Partners take part. In all, Blackpoint has raised $216 million, according to CEO Jon Murchison, a former National Security Agency computer operations expert.

Murchison founded Blackpoint in 2014 when the company mainly focused on government work. It wasn’t until 2019 that the startup entered the commercial space. Blackpoint‘s managed detection and response software aims to discover and neutralize cyber threats as they happen, Murchison said. Blackpoint’s goal is to never let its thousands of customers experience an attack, to keep them “left of boom,” which refers to preventing the adversary from completing their malicious cyber objective.

“If we catch anything or see anything, we take active response to keep bad guys out of the network,” Murchison said.

Hackers are finding it easier to attack further downmarket, said Dewey Awad, a partner at Bain Capital, who led the investment for the private equity firm.

That’s why Blackpoint focuses on small to midsize businesses, which usually get lots of attention from bad guys because they’re not as sophisticated, Murchison said. He wouldn’t provide names, but Blackpoint clients include everything from state governments to law firms to manufacturers. Blackpoint is the first company to do live responses to potential attacks on Microsoft 365, Murchison said.

Blackpoint is very close to profitability and growing by 100% each year, Murchison said. The company plans to use the new funds for R&D and to increase market scale. The startup hopes to add 50 people this year, bringing staff to about 200, Murchison said.   

Fundraising for Blackpoint’s Series C began in February, although it was not a formal process. “We had a lot of inbound interest. There were tons of growth equity companies looking,” said Murchison who declined to provide a valuation. Blackpoint is the latest cyber firm to raise capital. In May, Huntress collected $60 million in a Series C led by Sapphire Ventures, Fortune reported. 

Like Accel, which has invested in CrowdStrike, Bain Capital has much experience in cybersecurity. Deals include Blue Coat, which was sold to NortonLifeLock, Barracuda Networks, Solar Winds, and InAuth, which American Express acquired.

Bain Capital’s Awad has big plans for Blackpoint including a possible IPO. But that depends on the new issues market returning, whenever that happens. “Assuming [Blackpoint] will be big enough someday, that will be the type of company that is well received in the public markets,” Awad said.

Bain’s investment came from its Bain Capital Tech Opportunities Fund II, which closed on $2.4 billion in February. The growth pool, which sits between venture capital and buyout, focuses on software companies in sectors such as infrastructure and security, health care IT, financial technology, as well as vertical and horizontal applications. Bain Capital Tech Opportunities Fund II typically invests from $75 million to $250 million equity per deal, with an average check size in the $150 million range, Awad said. After the Blackpoint transaction, Tech Opportunities Fund II will be about 25% invested.

Awad said he continues to see down rounds for mid- to late-stage venture-backed companies which are using structure and financial instruments, like convertible debt, dividends, and liquidation preferences, to keep the headline multiple the same. “There’s lots of financial engineering used to represent the same headline value even though the cost of capital provided is less,” he said. But he is feeling more positive about the overall VC sector. “We are seeing the market pick up a little bit. We feel that good companies that raised previously at good prices are back in the market to advance their businesses. There are lots of green shoots,” Awad said.

See you tomorrow,

Luisa Beltran
Twitter:@LuisaRBeltran
Email: luisa.beltran@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Upperline Health, a Nashville-based patient care provider, raised $58 million in funding. Crestline Investors led the round and was joined by Silversmith Capital Partners and AdamBoehler. 

- GetHarley, a London-based skincare services and products marketplace, raised $52 million in funding led by Index Ventures. 

- SustainCERT, a Luxembourg-based climate impact verification platform, raised $37 million in funding. Partech, Hartree Partners, and others invested in the round.

- EliseAI, a New York-based conversational A.I. platform for real estate, raised $35 million in Series C funding. Point72 Private Investments led the round and was joined by Koch Real Estate Investments, Golden Seeds, Navitas Capital, JLL Spark, and DivcoWest. 

- Vertos Medical, an Aliso Viejo, Calif.-basedminimally invasive treatments company for lumbar spinal stenosis, raised $26 million in Series C funding. Norwest Venture Partners led the round and was joined by Pitango Venture Capital.

- Contextual AI, a Palo Alto-based LLM builder for enterprises, raised $20 million in seed funding. Bain Capital Ventures led the round Lightspeed, Greycroft, SV Angel, Elad Gil, Harry Stebbings, and other angels.

- Yuvo Health, a New York-based administrative and managed-care solution provider for community health centers, raised $20.2 million in Series A funding. Mastry Ventures led the round and was joined by AlleyCorp, AV8 Ventures, New York Ventures, HLM Venture Partners, Route 66 Ventures, VamosVentures, and Social Innovation Fund. 

- Blumira, an Ann Arbor, Mich.-based detection and response technology provider, raised $15 million in Series B funding. Ten Eleven Ventures led the round and was joined by RPSVentures, Mercury Fund, HPA, and Duo Security cofounder Jon Oberheide.

- Griffin, a London-based banking as a service platform, raised $13.5 million in Series A funding. MassMutual Ventures led the round and was joined by Seedcamp, Notion Capital, and EQT Ventures. 

- Laudio, a Boston-based management solution for health care, raised $13 million in Series B funding led by Define Ventures.

- NUVIEW, a Lake Nona, Fla.-based Earth observation company, raised $12 million in funding. MaC Venture Capital led the round and was joined by Broom Ventures, Cortado, FloridaFunders, Industrious, Liquid2, Veto Capital, and Leonardo DiCaprio. 

- Cleyrop, a Paris-based turnkey data platform for companies and institutions, raised €10 million ($10.7 million) in Series A funding led by Keen Venture Partners. 

- MatrixSpace, a Burlington, Mass.-based collaborative sensing solutions company, raised $10 million in Series A funding. Raptor Group led the round and was joined by Intel Capital and others.

- RevSure, a Palo Alto-based pipeline acceleration company, raised an additional $6 million in seed funding led by Neotribe Ventures. 

- Bonside, a New York-based financing platform, raised $4.35 million in funding. Floating Point, 81 Collection, TMV, Weekend Fund, Starting Line, The Fund, and Spice Capital invested in the round.

- PartnerSlate, a San Francisco-based online marketplace connecting food brands and contract manufacturers, raised $4 million in funding. Supply Change Capital led the round and was joined by Cleveland Ave, ResilienceVC, Pacific Fin Capital, Mentors Fund, Newlin VC, and the MBA fund. 

- Dock, a San Francisco-based customer relationship management platform, raised $3.5 million in seed funding. Craft Ventures led the round and was joined by Jack Altman, Operator Collective, and others.

PRIVATE EQUITY

- Infratil, the listed infrastructure business of Morrison & Co., acquired One New Zealand, an Auckland-based digital services and connectivity company, from Brookfield Asset Management for $1.1 billion. 

- Bulk Express Transport, a portfolio company of Alterna Equity Partners, acquired Attaway Hauling and Choice Bulk Carriers, Gordan, Ga.-based transportation and logistics services providers. Financial terms were not disclosed.

- DoseSpot, backed by PSG, acquired pVerify, a Tustin, Calif.-based insurance eligibility verification platform. Financial terms were not disclosed. 

- GrowthCurve acquired Netchex, a Covington, La.-based human capital management and payroll software provider, from affiliates of Primus Capital. Financial terms were not disclosed.

- MidOcean Partners acquired QualiTech, a Chaska, Minn.-based plant nutrition, animal nutrition, and food ingredient products and services manufacturer. Financial terms were not disclosed.

OTHER

- Hydrosat acquired IrriWatch, a Wageningen, Netherlands-based irrigation management software company. Financial terms were not disclosed. 

- Outpost24 acquired Sweepatic, a Leuven, Belgium-based external attack surface management platform. Financial terms were not disclosed.

- Snyk acquired Enso Security, a Tel Aviv-based application security management platform. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

- Nexa Equity, a San Francisco-based private equity firm, raised $180 million for a fund focused on investing in lower-middle market application software and fintech businesses. 

- Woven Capital, the Palo Alto- and Tokyo-based growth fund of Toyota Motor Corporation, promoted MichikoKato to partner.