Lacework raises $24M Series B for its AI-based cloud security service, led by Sutter Hill Ventures, bringing total raised to $32.7M
Dean Takahashi / VentureBeat :
Context & Ripple Effects
In August 2018, Lacework was an early bet on automating cloud security with AI, raising a $24M Series B that brought its total to just $32.7M — with lead investor Sutter Hill Ventures signaling conviction before the category had proven itself. What came after is the real story this round sits inside: Sutter Hill returned for a $42M round a year later, then Tiger Global drove a $525M Series D and a $1.3B raise at an $8.3B valuation within three years.
The subsequent coverage turns this modest Series B into a case study of the cloud-security funding cycle: headcount scaled past 1,000 by March 2022, then a 20% layoff months after the mega-round, and finally Fortinet's agreement to acquire the company in June 2024.
First-order effects
- Sutter Hill Ventures doubles down early on automated cloud security, giving Lacework the capital to build out its AI-based breach-detection product while rivals were still selling manual tooling.
Second-order effects
- The round's success pulls later-stage money into the same thesis — Sutter Hill's 2019 follow-on and Tiger Global's $1.3B check show investors repricing cloud workload security as a platform market rather than a feature.
Third-order effects
- The full arc — $1.8B raised, a $8.3B peak valuation, layoffs, and absorption by Fortinet — points toward cloud security consolidating into established networking vendors once the cheap-capital era ends, with independent pure-plays struggling to justify late-stage marks.
The trend: Cloud-security startups rode a five-year funding wave from modest Series Bs to billion-dollar valuations, only to consolidate into incumbent acquirers when growth expectations reset.