The six-year-old company revealed in October it secured US$30 million in scaleup funding from a group of investors led by New Jersey-based private equity firm Edison Partners.
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Ottawa-based cybersecurity startup Field Effect Software said Friday its investors topped up the company’s previously announced round of equity financing, bringing its total funding haul to US $34.5 million as it looks to push hard into the U.S. market in 2023.
The six-year-old company revealed in October it secured US$30 million in scaleup funding from a group of investors led by New Jersey-based private equity firm Edison Partners.
On Friday, Field Effect said it raised an additional US$4.5 million to close out the round, which also included participation from Round13 Growth Fund. The Toronto-based firm specializes in late-stage funding for Canadian technology ventures.
“They took the time to learn about the company and the industry,” Field Effect co-founder and CEO Matt Holland told Techopia on Friday morning. “They’ve impressed us. It’s always cool when there’s an external partner investing in you that is just as excited about the company as you are.”
Now at 190 employees, Field Effect makes software designed to protect small and medium-sized businesses against ransomware attacks and other cyber crimes.
Its flagship product, dubbed Covalence, uses analytics and machine learning to detect and neutralize cyberattacks. Its proprietary system alerts customers to potential threats and issues regular reports on suspicious activity in a “readable format” that’s designed for anyone – even the most IT-challenged manager – to understand.
The Glebe-headquartered company has quickly become a force in the fast-growing cybersecurity field.
Its revenues, which have been growing at about 75 per cent year-over-year, are now in the ballpark of US$20 million and rising.
The firm’s client list numbers in the hundreds, with high-profile local organizations such as the Ottawa Sports and Entertainment Group and accounting firm Welch LLP among them. And once it gains a customer, Field Effect almost always keeps it – the organization has lost just one client in the last five years.
Field Effect has steadily expanded its reseller network in a bid to crack foreign markets, inking deals with sales partners like Harris Computer while opening offices in the U.S., Australia and the U.K. Holland said the company plans to announce another strategic sales partnership next week.
“Going direct is fine – it’s just a very challenging thing to go head to head in a direct market with multibillion-dollar companies,” he explained. “The odds of success in that case are pretty low. In essence, partnerships allow us to grow at a much faster rate.”
Yet despite its efforts to expand its footprint beyond Canada, domestic sales still account for about two-thirds of Field Effect’s overall revenues. It’s a ratio Holland is eager to flip in favour of the much larger American and European markets, and he’s hoping the new injection of capital will help it reach that goal faster.
“It’s all about growth,” Holland said. “We need to build up a U.S. team that knows the country, knows the dynamics of the U.S. market. You can’t do that organically. This funding allows us to do it in a structured way that greatly increases the likelihood of success
“We have a ton of confidence in the product and what we bring. When you look at the scale of the U.S., taking that product, the service, the formula and bringing it to a larger market, it should be gangbusters.”
