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Expel, a managed security service (MSS) provider companies can outsource their cybersecurity to, has raised $50 million in a series D round of funding led by Alphabet’s CapitalG. The raise comes amid reports that cyberattacks have surged a third or more during the COVID-19 crisis, with bad actors capitalizing on the number of employees working remotely from insecure networks.
While myriad security platforms already promise to identify network threats, protect endpoints, and secure clouds, Expel essentially sits in the middle, plugging into companies’ existing cybersecurity tools — like Splunk and Darktrace — to make them work more effectively.
Expel is what is known as a “security operations center-as-a-service” and monitors all threats and anomalous behavior, serving businesses with plain-English advice rather than spitting out streams of alerts for every possible threat. Aside from its core platform, Expel also leans on human analysts who monitor their clients’ environments for threats, investigating and responding as necessary while proactively searching for malicious activity.
CapitalG general partner Gene Frantz, who joins Expel’s board as a result of the investment, said enterprises are facing “an inexhaustible supply of bad actors” and wading through the deluge of alerts security tools generate requires a degree of human intervention. Expel is setting out to address this by helping businesses scale their cybersecurity operations without worrying about hiring cybersecurity talent.
Much has been written about the cybersecurity skills gap, with a recent study by (ISC)² looking at the cybersecurity workforce in 11 markets. The report found that while 2.8 million people currently work in cybersecurity roles, an additional 4 million were needed — a third more than in the previous year. While AI and automation may play a role in plugging this gap, what companies such as Expel promise is a fully equipped security operations center — powered by a combination of technology and human security analysts.
Expel had previously raised nearly $68 million, including a $40 million round less than a year ago, and with another $50 million in the bank it plans to invest in sales and marketing, expand globally, and double down on its cloud security offering, which covers public cloud platforms like AWS, Azure, and Google Cloud Platform. Other investors in the round include existing backers Battery Ventures, Greycroft, Index Ventures, Paladin Capital Group, and Scale Venture Partners.
The global cybersecurity market was pegged at $119 billion in 2018, a figure that is expected to more than double within four years. Although the general feeling is that demand for cybersecurity should continue to accelerate due to the impact of COVID-19, a Research and Markets report out today suggests the pandemic could actually slow the sector’s growth due to reduced budgets.
The MSS segment specifically was reportedly worth $25 billion in 2018 and is shaping up to rise to nearly $50 billion in the coming years.
An Expel spokesperson said that while the company hasn’t seen a significant increase in demand that can be directly correlated with COVID-19, it believes the cybersecurity market will remain strong in the coming years. With big-name backers such as CapitalG on board, investors clearly think managed security services could be in even greater demand down the road. As more evidence, just a couple of months ago Expel’s rival Arctic Wolf closed a fresh $60 million in funding.
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