Zero To $100 Million In Nine Months: Index, Sequoia Back Cybersecurity Company Led By Former Microsoft Execs

In March, as the Covid-19 pandemic was sweeping the globe, Assaf Rappaport was pushing hard to convince major companies that his new cybersecurity company was going to be the hot new thing. Having just left his post as a Microsoft executive in Israel, the bet needed to pay off. “We were meeting CISOs, shaking hands,” Rappaport says. The timing couldn’t have felt worse.

Now, just nine months after writing their first lines of code, Rappaport says that he and his team at Wiz have landed $100 million in funding from some of Silicon Valley’s most prominent investors, in one of the larger first-year funding rounds for a startup in 2020. 

Bay Area-based Wiz is coming out of stealth with a software tool that Rappaport claims can onboard its enterprise clients in 15 minutes, giving them visibility into IT threats across an entire cloud network. The company has already secured more than 30 corporate customers, Wiz says, with venture capital firms Index Ventures, Sequoia, Insight Partners and Cyberstarts all joining its series A funding round. Forbes estimates that the funding likely values Wiz around half a billion dollars; Sequoia global managing partner Doug Leone says such a guess “wouldn’t be far off.”

Wiz’s dramatic rise comes amid white-hot demand for cybersecurity services, a sector that has boomed during the pandemic as corporations try to secure their networks as they move from on-premise networks to the cloud. Research firm Gartner recently forecasted that end-user spending for the information security and risk management market will grow at a compound annual growth rate of 8.2%, becoming a $207.7 billion market by 2024. Publicly-traded cloud cybersecurity companies such as Proofpoint, Splunk and Crowdstrike have each reported growing demand for services this year.

Rappaport and his co-founders — Ami Luttwak, Yinon Costica, and Roy Reznik — all in their late 30s, first met in Unit 8200, an elite intelligence division of the Israel Defense Forces, equivalent to the National Security Agency in the United States. After leaving the IDF, the four men started Adallom in 2012, a startup that helped customers manage multiple cloud security applications. 

Adallom was a fast success, and Microsoft acquired it for $320 million in 2015, appointing its founders to lead Azure’s Cloud Security Group. At Microsoft, Rappaport says he became increasingly aware of a growing problem for large companies: managing cloud security threats was a fragmented process, with security teams becoming overwhelmed by alerts. With that in mind, Rappaport announced he was leaving Microsoft last December to start another company, and his Adallom team soon followed suit. 

Since its March start, Wiz says it has secured several of the U.S.’ largest companies by revenue as clients; it named DocuSign as one notable customer. In addition to Wiz’s claim that it can onboard clients in minutes, Rappaport says the company is providing corporate IT security teams with a singular platform that allows them to scan an entire cloud environment for vulnerabilities, risks and identity issues, as opposed to using multiple tools. 

Wiz found a keen investor in Shardul Shah, the partner at Index Ventures who led the firm’s investment, and previously invested in Adallom. When asked why Index went so big on Wiz’s first funding round, Shah pointed out that the average startup typically takes between 35 and 40 months to generate $2 million in annual revenue. “It’s taken Wiz less than six,” Shah says. “It’s a completely different slope.”

The company consists of 30 employees today. Leone, Shah, and Jeff Horing at Insight Partners and Gili Raanan of Cyberstarts will join Wiz’s board. 

At Sequoia, Leone says that given Wiz’s well-established founder group and product, there was little point in following the typical startup funding playbook. “Why are you going to make a small investment, what are you going to find out?” Leone says. “Invest in them and let them rock and roll — unleash them.”