Menlo Security, which offers a cloud-based isolation service that separates enterprise networks from the public web, raises $100M Series E at a $800M valuation
'Despite the challenges of COVID, we're having a great year. We have a solution that's of high relevance in the COVID era …
Context & Ripple Effects
Menlo Security has been building the same thesis since it emerged from stealth in 2015 with $25M promising to defeat malware by isolating web content away from enterprise networks. The company scaled through a Series C backed by Amex Ventures, HSBC and JPMorgan Chase and a $75M round led by JP Morgan Asset Management in 2019, giving its isolation platform an unusually bank-heavy investor base.
The new $100M Series E at an $800M valuation lands five days before Cato Networks' $130M Series E at a $1B+ valuation — two cloud-delivered security raises inside one week of November 2020, both pitched at protecting workforces that COVID pushed off the corporate network.
First-order effects
- Menlo Security gets fresh capital to scale its isolation service at the moment its pitch is strongest: with employees browsing from home networks, separating endpoints from the public web is directly relevant to how enterprises now operate.
- An $800M valuation puts Menlo within reach of unicorn status, tightening the gap with Cato Networks, which crossed the $1B mark the same week with a larger round.
Second-order effects
- Cato Networks' back-to-back raise signals that investors are funding multiple cloud-delivered security platforms simultaneously, forcing each vendor to compete on breadth of cloud coverage rather than on whether to move to the cloud at all.
- Enterprise buyers evaluating isolation and secure-access services now face a crowded late-stage field, which pressures pricing and pushes vendors toward bundling more of the security stack into one subscription.
Third-order effects
- If the pattern holds, enterprise network security restructures around cloud-delivered platforms that sit between users and the public web, displacing perimeter-appliance spending and concentrating capital in a handful of well-funded players.
- The succession of nine-figure rounds across isolation, secure access, and email security suggests late-stage security valuations are being reset upward around COVID-driven demand, raising the bar for any vendor still selling on-premises defenses.
The trend: Enterprise security is consolidating into cloud-delivered platforms financed by ever-larger late-stage rounds, with the pandemic accelerating the shift of the network perimeter itself into the cloud.