Lookout Inc., a maker of smartphone security software, has joined the $1 billion-plus valuation club.
The San Francisco-based company raised $150 million in new funding led by mutual-fund firm T. Rowe Price Group Inc., with participation from investors including Morgan Stanley, Wellington Management Co., Goldman Sachs Group Inc. and Amazon.com Inc. Chief Executive Officer Jeff Bezos’s Bezos Expeditions, the startup said today in a statement. Lookout plans to use the money for product development and to build its sales to large businesses.
The financing values Lookout at more than $1 billion, said a person with knowledge of the matter, who asked not to be identified because the numbers are private. The company had previously raised $131 million from venture capital firms including Greylock Partners and Index Ventures.
Lookout’s nine-digit funding is part of a trend of megadeals for closely held Silicon Valley companies. Startups including Hortonworks Inc., Airbnb Inc., Kabam Inc. and AppDynamics Inc. have all raised $100 million or more in new financings this year.
The fundings have boosted the companies’ valuations, in some cases far above the $1 billion-plus level. According to researcher CB Insights, 14 U.S. technology companies entered the $1 billion valuation club in the first half of the year, more than double the number of startups that did so in all of 2013.
Lookout was started in 2007 while co-founders John Hering, Kevin Mahaffey and James Burgess were undergraduates at the University of Southern California. While Lookout’s applications are free, the company makes money from premium features that cost $2.99 a month, and its algorithms can be used by mobile operators to spot problems in their networks. The company’s partners include AT&T Inc., Sprint Corp., Deutsche Telekom AG and Orange SA.
Lookout has 50 million consumer subscribers and millions who pay to use its technology to secure devices that use Google Inc.’s Android mobile software or Apple Inc.’s iOS operating system.
In March, Lookout appointed former Akamai Technologies Inc. executive Jim Dolce as CEO, replacing Hering, who became executive chairman. Lookout stands to benefit from several shifts in technology, including the move from personal computers to mobile and the need for stronger security, Dolce said at the time.
“Jim is a key piece in helping set the company up for scale,” Hering said in an interview at the time. “Our primary focus is building the company, and this is another piece of the puzzle to allow the company to do whatever makes sense to take it to the next level.”