I'm thrilled to announce that Rapid7 has closed a $50M round of funding today from Technology Crossover Ventures (TCV). This deal has the potential to change our part of the security landscape, since it allows us accelerate even more rapidly in several new ways:
- Aggressively expand into new product areas by creating a Boston, MA innovation center and growing our existing centers in Los Angeles, CA and Austin, TX
- Expand internationally
- Acquire technologies in related areas to provide broader integrated security solutions to our customers
This is a game changer for Rapid7 and for our customers, and in a very different way it will be a game changer for our competitors.
It's been an exciting several months since we decided to pursue the funding round. We've had a truly ridiculous number of VCs asking us over the last year whether we were interested in more investment. It turns out that there aren't many companies that are continuing to show explosive growth at scale, cash positive, and that have a terrific market opportunity. When we asked ourselves what we could do with additional funds to make a real, material difference, we realized that a number of our ideas make a compelling case for taking the growth round. At that point things got crazy. I started saying “yes” to some of the inbound requests and reaching out to a select couple of firms, and within a couple of weeks we had literally six different firms that wanted to invest in Rapid7. As one of them put it to me, “You've got everything we're looking for: a white-hot market, explosive growth and remarkable financials, a huge market opportunity, great customers and great loyalty, and a terrific team.” As you might imagine, the price went up significantly from where we started – and in fact ended up almost twice as high as we thought it might be before we started the conversations. We actually didn't choose the highest offer, but instead chose the company that had the right combination of factors that are important to us:
- A great partner in Tim McAdam from Technology Crossover Ventures who will work with us as a board member to build the business
- Deep experience in our industry
- A proven track record of helping companies “cross over” from private to public
- Financial terms acceptable to us
I'm looking forward to working with Tim and TCV to take Rapid7 to the next level.
What will we do with the money? The first thing is to double down on expanding our engineering team. We doubled the team in 2010 and nearly doubled it again in 2011, and we plan to double it again in 2012. We'll create a new innovation center in Boston, MA, and continue to expand our existing centers in Los Angeles, CA and Austin, TX. If you're a rock star engineer and you want to change the security world working at a company that's been repeatedly voted one of the best companies to work for, give us a shout at firstname.lastname@example.org.
The next thing we'll do is expand internationally, in particular in EMEA and APAC. If you've got experience building hyper growth businesses in Europe and want to transform the security world, we'd love to hear from you.
And finally, we'll plan on acquiring companies and technologies in areas closely related to our existing business. If you've built a world-leading product or technology that you think our customers would benefit from but you don't have the background or inclination to build a business around it, let's talk about how we can work together as part of Rapid7. Contact us at email@example.com.
The last few years have been transformative for Rapid7 and with this new investment, the pace of change will accelerate even further. The entire Rapid7 community will benefit: our company, our customers, our free user community, our partners, and potentially new members of the Rapid7 community. Watch this space in the coming months; we'll have a lot of exciting news to share.