IBM’s $2 Billion Man Is Amassing a Cybersecurity Startup EmpireBy
StackPath raised $180 million from investors this year
Startup acquired four companies and has 30,000 customers
After selling his last company to IBM for $2 billion, Lance Crosby is now the one doing the acquiring. StackPath, a cybersecurity firm he founded last year, has already raised $180 million and bought at least four startups.
The strategy is unusual for a company just starting out. The financing, including a $150 million commitment from private equity firm ABRY Partners, is the second-biggest so far this year for a company at this stage, according to research firm PitchBook. (The largest was autonomous-car startup Zoox Inc.)
Crosby became a highly admired entrepreneur after founding SoftLayer in his living room just over a decade ago and selling it in 2013 to International Business Machines Corp. for $2 billion. The acquisition helped jumpstart Big Blue’s cloud operations. After leaving IBM last year, Crosby said he spent three months studying the cybersecurity industry. He learned about the contentious relationship between software developers who like to ship code and their colleagues who want to make those products secure.
Many developers view security protocols as cumbersome and a deterrent to getting their work into people’s hands quickly, Crosby said. Coders often ignore security policies completely, and as a result, security administrators see them as “enemies,” he said.
To ease that process, StackPath is developing security tools that programmers can quickly hook into their code. The startup also offers tools that compile data from all the security software a customer is using, including those made by other companies. This portal is designed to find the most important alerts to help identify and eliminate threats to a system.
Businesses will be able to subscribe to StackPath services, similar to the way Amazon.com Inc. sells space in the cloud on a pay-as-you-go basis. The Dallas startup will initially target small internet companies, Crosby said. The software should be especially useful for consumer apps that may have security holes, he said.
“The world has just accepted that if it’s a consumer application, it’s not secure,” Crosby said. “But there’s no reason for that.”
Thanks in large part to the four cybersecurity startups it bought, StackPath already has 30,000 customers, Crosby said. They range from small startups to some of the world’s most valuable companies, he said.
StackPath has deployed virtual servers in 25 locations in highly populated parts of the world, including New York and Miami. Doing so allows StackPath to provide the fastest service, Crosby said. The startup has spent tens of millions of dollars to build up that infrastructure.