ReliaQuest, maker of open XDR platform, reaches $1B valuation with new funding

ReliaQuest, whose extended detection and response (XDR) platform unifies data from across a customer’s security tools, today announced new funding to ramp up its global expansion that brings a post-money valuation of more than $1 billion.

Founder and CEO Brian Murphy said that in addition to growing the business and expanding the team, the funding will also go toward development of new AI-powered capabilities on the company’s platform, GreyMatter.

The open XDR platform has seen rapid growth among enterprises because it offers substantially better security visibility and threat prioritization, while still allowing businesses to keep using all of their existing security technologies, Murphy said. GreyMatter enables customers to unify their detection, investigation, and response, he said.

Tampa, Florida-based ReliaQuest said the new funding round was led by existing investor KKR and included participation from Ten Eleven Ventures and FTV Capital, as well as from Murphy. The company did not disclose the funding amount or the exact valuation.

The firm says it has found strong interest in its open, unified approach at a time when many enterprises are struggling with security tool sprawl. A recent survey from cyber vendor Trend Micro found that enterprises typically have an average of 29 different security tools, while the largest organizations have an average of 46. This has led to an inability to effectively prioritize security alerts, with many tools going unused or underused, according to the survey.

An open approach

ReliaQuest’s GreyMatter platform is “open” because it integrates with more than 70 different security technologies and spans all environments, both cloud and on-premises, Murphy said. This open approach is “why we win,” he said. “When we tell customers that they can leverage what they already have, it really makes the conversation pretty smooth from there.”

ReliaQuest reports it currently generates more than $100 million in annual recurring revenue and expects revenue growth of 40% for 2021. And the company forecasts that its growth rate will actually accelerate in 2022, to revenue growth of more than 50%, Murphy said.

Traditionally focused on Fortune 1000 enterprises, ReliaQuest customers include American Eagle Outfitters, Campbell Soup Company, St. Jude Children’s Research Hospital, and Tractor Supply Co. — as well as investor KKR and two pro sports franchises, the Tampa Bay Buccaneers and Boston Celtics.

In 2021, the company has begun expanding to serve mid-market customers, as well. That’s led to a major increase in its customer count, which has grown about 65% this year to surpass 350 customers in total, Murphy said.

Translating the data

ReliaQuest holds 52 patents, including for its Universal Translator technology that serves as a key to the GreyMatter platform, Murphy said. The Universal Translator capability pulls security data from a customer’s different sources, translates the data into a common format, and then enables action to be taken based on this unified picture, he added.

“That gives us the opportunity to go to a customer and say, ‘Don’t rip and replace,'” he said. “Let’s take what you have, make it actionable, and allow you to detect and respond across a wider span of tools and technologies than you’ve ever been able to do before. And then you can be thoughtful around the acquisitions of new technologies you want to make.” Thus, GreyMatter allows customers to use their existing tools better, while getting visibility into more of their environment than was previously possible, Murphy said.

Part of the beauty is that the platform doesn’t require customers to have any certain type of security tool, either, he said. “What we’re acknowledging is that you’re going to have a diverse and unique infrastructure — and we’re open to allow you to leverage all of that,” Murphy said.

ReliaQuest also provides ongoing support services from its own security operations center to round out its offering to customers, he said.

AI, ML advancements

One main goal for the new funding round is to continue adding new capabilities powered by AI and machine learning (ML) to the GreyMatter open XDR platform. The platform already uses AI and ML to help with determining what a normal, secure state looks like and what outliers look like, Murphy said.

The company plans to continue improving these capabilities, as well as using AI and ML to offer enhanced automation, such as automated parsing and automated correlation, he said.

ReliaQuest will also look for opportunities to provided enhanced, real-time threat intelligence into the correlation and response functionality of the platform, Murphy said. “It’s something we’re doing now, but we want to use automations, machine learning, and AI to do it quicker and faster,” he said.

The company also expects to continue adding more integrations with additional security technologies on a continual basis, Murphy said. “As you add more integrations, the opportunity to automate across that larger field increases. It’s a really challenging thing when you think about normalizing all that data and getting it all to work well together,” he said. “Given how fast the market changes, there’s always something new we have to integrate.”

Growth spurt

In terms of expansion in the market, ReliaQuest aims to use the funding to expand in its existing regions of North America and Europe, as well as into geographies such as Central America, South America, and Asia-Pacific. The company also plans to continue adding to its team, which now totals 700 people. ReliaQuest’s headcount could potentially double in size in the next 12 to 14 months, Murphy said, with 50 or more new hires every month.

Originally founded in 2007 as an IT infrastructure consulting firm, ReliaQuest shifted to security the next year and began to focus on visibility and detection starting in 2012.

The firm’s most recent prior round of funding — a $300 million round in August 2020 — was also led by KKR. ReliaQuest did not disclose how much funding it has raised in total with the new round.

Murphy noted that he bootstrapped the business for nine years, prior to raising the company’s first funding, a $30 million round from FTV Capital, in 2016. “We’ve always run the business like a business. We had to really be good at effectively solving a customer’s problem, so that the customer would want to stay with us,” Murphy said.

While new cybersecurity products debut on an almost daily basis — and ReliaQuest is considerably older than many startups operating in the security space today — Murphy said the type of offering that the company provides is not something that could be built quickly.

“We have a unique understanding of the problem because we have been in the weeds, turning those wrenches with our customers, for a decade,” he said, referring to the vendor’s shift into visibility and detection in 2012.

Ultimately, ReliaQuest aims to serve as “force multiplier” for a customer’s security operations, he said. “And that’s a focus that is rare in the market.”