BUSINESS DISCUSSION
SOMETHING VENTURED: Venture Capitalists Set
Sights on Cloud Security
ProQuest document link
FULL TEXT
(This article was originally published Wednesday.)
–Venture capitalists are funding startups that can remove one of cloud computing’s few remaining obstacles: data
security.
–Companies are worried about the security of data in the cloud
–And many face government and industry regulations about how data can be stored in the cloud
By Scott Denne
As cloud computing continues to take a larger share of computing budgets, venture capitalists have been getting
behind startups that can remove one of the movements few remaining obstacles: data security.
Now one of Silicon Valley’s most influential venture firms, Andreessen Horowitz, has followed up with more funding
for one of its early seed investments in the space by leading a new $30 million round for CipherCloud Inc., a company
that encrypts data in order to keep it secure. Other existing investors Index Ventures and T-Venture, the venture
capital unit of Deutsche Telekom AG, also participated.
“One of the problems I noticed in 2010 was all these enterprises wanted to adopt cloud applications,” said Pravin
Kothari, the company’s chief executive and founder. “But the big problem they had was that they had no control over
their data.”
John Jack, a board partner at Andreessen Horowitz, contemplated entering this market when he was CEO of Fortify
Software Inc., a maker of application security testing software, but decided that it wasn’t closely related to the core
business and “we couldn’t quite figure out in our minds how to solve the problem,” he said.
That hasn’t stopped other startups from getting into the cloud encryption market. In February, Valutive Inc. raised $10
million in Series A funding for a similar service that’s focused on cloud-based Microsoft applications, and Porticor Ltd.,
which makes an encryption service centered around Amazon.com Inc .’s cloud services, launched that same month
with an undisclosed amount of funding.
Last year PerspecSys Inc. raised an $8 million Series A from Intel Capital and others, and Salesforce.com Inc. acquired
cloud encryption company Navajo Systems shortly after it raised seed funding from Jerusalem Venture Partners.
Companies are not only worried about the security of critical data, like customer information, but many also face
government and industry regulations about how the data can be stored when they’re considering implementing
cloud applications.
CipherCloud ‘s service solves that problem by encrypting data before sending it out to a cloud application.
CipherCloud provides encryption tools built around several specific applications, including Salesforce.com and
Gmail, or a template for encrypting data for other applications and cloud services.
Providing such a service may be a simple idea, but it’s difficult to execute. The gateway that encrypts the data has to
be extremely secure and support high levels of traffic for applications that are a crucial part of a business, Mr. Kothari
PDF GENERATED BY PROQUEST.COM Page 1 of 3
said.
Though CipherCloud ‘s latest round is technically its Series A round, the two-year-old company is well past that stage
of development, Mr. Kothari said. It already has over 40 enterprise customers, 1.2 million people using the service and
a revenue run-rate that’s over $10 million, he said.
As the market for cloud computing continues to grow, CipherCloud will grow with it, said Mr. Kothari, who previously
founded ArcSight Inc . Research firm Gartner predicts that a quarter of enterprises will use cloud security applications
by 2016. The same firm predicts the market for cloud computing to grow 20% this year to $109 billion.
Prior to this round, CipherCloud raised $1.4 million in seed funding. Mr. Kothari declined to disclose the valuation on
the round.
Write to Scott Denne at [email protected].
(TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at
[email protected]. Readers should include their full names, work or home addresses and telephone
numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we
reserve the right not to publish reader comments.)
(END)
December 13, 2012 07:35 ET (12:35 GMT)
DETAILS
Subject: Software; Funding; Data encryption; Cloud computing; Startups; Venture capital
Business indexing term: Subject: Startups Venture capital; Corporation: Salesforce Inc
Location: Silicon Valley-California; Jerusalem Israel; United States–US; Israel
Company / organization: Name: ArcSight Inc; NAICS: 513210; Name: PerspecSys Inc; NAICS: 513210; Name: Index
Ventures; NAICS: 523910; Name: Microsoft Corp; NAICS: 334610, 513210; Name:
CipherCloud Inc; NAICS: 513210; Name: Intel Capital; NAICS: 523910; Name: Jerusalem
Venture Partners; NAICS: 523910; Name: Deutsche Telekom AG; NAICS: 517111, 517112;
Name: Amazon.com Inc; NAICS: 334310, 454110, 518210; Name: Andreessen Horowitz;
NAICS: 523910; Name: Fortify Software Inc; NAICS: 513210; Name: Salesforce Inc; NAICS:
513140, 513210, 541613
Publication title: Dow Jones Institutional News; New York
Publication year: 2012
Publication date: Dec 13, 2012
Publisher: Dow Jones &Company Inc.
Place of publication: New York
PDF GENERATED BY PROQUEST.COM Page 2 of 3
LINKS
Check for full text in other resources
Database copyright 2025 ProQuest LLC. All rights reserved.
Terms and Conditions Contact ProQuest
Country of publication: United States
Publication subject: Business And Economics
Source type: Wire Feed
Language of publication: English
Document type: News
ProQuest document ID: 2104657781
Document URL:
feeds%2Fsomething-ventured-venture-capitalists-set-
sights%2Fdocview%2F2104657781%2Fse-2%3Faccountid%3D8289
Copyright: Copyright Dow Jones &Company Inc Dec 13, 2012
Full text availability: This publication may be subject to restrictions within certain markets, including
corporations, non-profits, government institutions, and public libraries. In those cases
records will be visible to users, but not full text.
Last updated: 2024-12-05
Database: ProQuest Central
PDF GENERATED BY PROQUEST.COM Page 3 of 3
- SOMETHING VENTURED: Venture Capitalists Set Sights on Cloud Security
