TCV Invests in Machine Identity Protection Provider Venafi — A Pioneer of a Vital New Category in Cybersecurity
Category-creating companies typically tackle a problem people didn’t know they had, or a problem considered too big to solve. Under CEO Jeff Hudson, Venafi has taken on one of the largest unrecognized problems imaginable: managing the encrypted communications between the machines that run in every organization and the internet. As result, Venafi is defining a new category called Machine Identity Protection.
At TCV, we’ve been watching the number of machines grow exponentially. It’s not just that IoT (Internet of Things) is connecting physical devices to the internet. It’s the software machines — virtual servers, containers, microservices — that are proliferating even faster due to cloud computing and the shift to mobile apps. These software machines are now creating machines on their own. Everything we do online involves machines identifying each other before granting access, delivering data, or conducting transactions. If those encrypted connections are not secure, nothing is.
But surprisingly few companies are trying to crack this problem at the necessary scale. Instead, the world poured billions of dollars into securing human identities, while the number of machine identities grew exponentially behind the scenes. When Jeff Hudson came to Venafi in 2010, driving the company’s evolution toward machine identity protection, we saw a great fit with our core investment thesis that continued growth in the digital economy depends on security. Creating the Machine Identity Protection category positions Venafi at the intersection of multiple major tech trends including cybersecurity, the cloud, IoT, SaaS, and DevOps. So we are truly excited to invest in the company and partner with Jeff’s team in scaling Venafi to its full potential.
The company has plenty of momentum, with more than 300 customers, and with its portfolio of 30 patents, Venafi has lifted machine identity out of the fragmented, nuts-and-bolts phase and elevated it to full solution status. The Venafi platform gives enterprises global visibility into their machine identity risks, generates actionable intelligence for managing them, and automates the processes for addressing them. Early adopters have learned that the Venafi platform transcends and unifies many of the security point solutions out there, from inventorying and policy enforcement to analytics and threat detection. And once customers discover what Venafi can do for them, they want more.
None of this comes as a surprise, because Jeff has a rare combination of strategic vision and disciplined execution. He plays the long game and that’s why he increased Venafi’s R&D efforts to address a problem most people didn’t see coming: the need to secure encrypted communication not just between people and machines, but between the machines themselves. At TCV, we also witnessed Jeff’s skill in recruiting world-class talent at a time when the supply of engineering talent is getting tight, particularly in the cybersecurity sector.
Jeff and his team recognize the critical role security plays in the digital economy. It’s not just about selling product, it’s about securing connections, data, and commerce. It works with anyone’s cloud and any type of machine. The open, public key infrastructure (PKI) system that underlies internet security has created a horde of “Certificate Authorities” (CAs), to the point that many large companies don’t know how many different CAs they are dependent upon. We believe Venafi dissolves these complexities, giving enterprises a unified, vendor-agnostic, dashboard-driven view of machine identity.
Given the growing risks that all companies and consumers face from cybercriminals, it’s essential that the fragmented security industry find more cohesive solutions, and Venafi is showing a way forward. TCV is excited to come onboard and contribute to the journey.
The views and opinions expressed in the blog post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. Certain information contained herein has been obtained from third-party sources, including any portfolio companies described above. Such information has not been independently verified by TCV, and TCV does not assume responsibility for the accuracy of such information.
Originally published at www.tcv.com on November 29, 2018.