Photo: J. Paul Haynes, CEO of eSentire, appeared at Communitech's Tech Leadership Conference this year, where he characterized cyber security as 'the elephant in the room' that many organizations fail to confront until it's too late.
Fast-growing security firm eSentire has raised $14 million in new investment as it scales up to protect top-tier financial institutions from cyber attacks.
The Cambridge-based company, which already employs about 100 people and protects more than $2 trillion in combined assets, will hire another 40 to work in its research facility as soon as possible.
The Series C investment and extra staff will put eSentire on track to more than double its customer base – currently at 450 medium-sized and small enterprises, including many Wall Street hedge funds – and to start serving major financial institutions, company CEO J. Paul Haynes told Communitech News.
“We’re aggressively funding R & D right now, and a good chunk of this [investment] is for R & D that will put us into a bigger segment of the security market,” Haynes said in an interview. Top tier banks “have the exact same need as our market,” he added, “but the complexity of their environment requires us to make investments to support them.”
eSentire, which pioneered a security model known as “continuous advanced threat protection,” uses full-time, round-the-clock monitoring of its customers’ systems from inside the firewall to spot and thwart attacks in real time. This approach challenges traditional security regimes, which tend to look “from the perimeter in” rather than from the data out, Haynes has said.
The company’s business has been growing at 100 per cent annually, a pace it will be able to sustain for another two-plus years thanks to the new investment, he said.
The Series C round was led by Toronto-based Georgian Partners, with participation from Cisco Investments and Northleaf Venture Catalyst Fund, plus existing eSentire investors Edison Partners and VentureLink.
Northleaf Venture Catalyst Fund is a $300-million “fund of funds” led by private-sector investors and supported by the governments of Canada and Ontario. The fund, managed by Northleaf Capital Partners in Toronto, was unveiled earlier this year in Waterloo Region, and aims to invest in companies in the early and middle stages of growth.
Cisco is particularly interested in eSentire’s innovation around securing data in the era of “the Internet of Everything,” the term that describes a world increasingly filled with connected devices.
“Cybercrime is a growing and continued threat to all facets of life around the world,” Cisco Canada President Nitin Kawale said. “We believe eSentire will continue to meet this challenge as the company grows its global footprint.”
eSentire will have some high-level help in doing so; it recently added Gus Hunt, the former Chief Technology Officer for the Central Intelligence Agency (CIA), to its advisory board.
At a Communitech breakfast in June, Hunt spoke of a “perfect storm of cyber security” as criminals around the globe look to exploit the mountains of data gathered by increasingly ubiquitous devices and stored in the cloud.
“The number of breach attempts that happen on a daily basis is staggering,” Haynes said. “For the uninitiated it’s a bit awe-striking to find out just how bad it is out there.”
Haynes said it will be a challenge to quickly bring 40 new security technologists on board at eSentire, given the specialized nature of the job. In addition to requiring network expertise, the role is also “one-third air traffic controller and one-third World of Warcraft,” he said.
“You have to be comfortable with 30 planes in the air and unfolding circumstances, and realizing ‘this one’s in trouble; I’ve got to go help,’ but keeping in the back of your head the other 29,” he said. “That’s the challenge, and it’s a bit of a gamer mindset, to be honest.”
While there are some candidates with security experience to be found in Waterloo Region, Haynes expects to have to reach into greater Toronto and beyond to quickly find the talent the company needs.
Hiring on aptitude and ability to learn and then following up with several months of specialized security training has worked well for eSentire to date, but its investors “would prefer us to hit the ground running,” he said.
“The challenge will be getting people who have a security background,” Haynes said, “because when investors put their money in, they say ‘how many of those people have you hired?’ and ‘how come you haven’t hired them yet?’”
