One of Orange County’s hottest and highest valued private companies has moved its headquarters from Irvine to Silicon Valley.
Security software maker CrowdStrike Inc., which has raised hundreds of millions of dollars in venture capital, confirmed to the Business Journal that it’s shifted corporate influence to Sunnyvale, home of Yahoo and Juniper Networks.
“With a significant concentration of executives and key team leaders in the Bay Area, the location is a big growth and talent hub for our business and it made strategic sense to officially name our Sunnyvale office as our headquarters,” the company said in a statement sent to the Business Journal.
The assessment is a bit of a sting to OC’s diverse tech sector and to the emerging cybersecurity hub developed here over the past few years.
CrowdStrike’s relocation shouldn’t come as a big surprise, though, as several of its influential investors are in Northern California, home to the world’s most fertile VC and tech scene.
The company has raised nearly $275 million since it was established in 2011 by former executives of McAfee Inc. and Networks in Motion Inc. That includes a recent $25 million add-on from an oversubscribed $100 million Series D round raised in May, the second time the company’s hit that funding benchmark.
The software maker has used the money for global expansion and to meet demand for its CrowdStrike Falcon product for endpoint protection.
Its big investors include CapitalG, formerly Google Capital—the finance arm of Alphabet Inc. in Mountain View; Accel, a VC firm with offices in Palo Alto and San Francisco that backed Facebook, Dropbox and Rovio in early rounds; and New York-based Warburg Pincus, which has a San Francisco office.
Newer backers include Santa Monica-based March Capital and CrowdStrike customer Telstra, Australia’s largest telecom.
The unicorn hasn’t raised local funding.
OC Operations
CrowdStrike said it will keep growing its Irvine operation, despite the development.
“As we continue to drive explosive growth across multiple markets, we are actively expanding our office space in Orange County to support our increased employee count,” the company told the Business Journal.
CrowdStrike is the 30th largest software maker in OC, with 53 local jobs at its 15440 Laguna Canyon Road office. It employs more than 700 companywide.
The company has added 12 local positions in the past year and nearly 300 in other markets.
Rankings Climb
Its products are designed to detect, prevent and respond to security threats and attacks and provide monitoring, cyber intelligence services, and big-data analytics.
The company’s revenue has zoomed well past $50 million with a roster of hundreds of government agencies and Fortune 500 customers, such as Sony and ADP, that pay a monthly subscription fee for cloud-based software services.
CrowdStrike was ranked No. 30 this year among the top 100 private cloud companies in the world by Forbes and Bessemer Venture Partners. The Forbes 2017 Cloud 100, judged primarily by chief executives at publicly traded cloud companies, weighed four factors: market leadership, 35%; estimated valuation, 30%; operating metrics, 20%; and people and culture, 15%.
CrowdStrike is among a handful of companies in the world accredited by the National Security Agency to respond to and remediate cybersecurity incidents.
Funding
It hit the $100 million fundraising milestone in July 2015 in a Series C round led by then-Google Capital. It said CapitalG led the $25 million follow-up Series D round.
The recent funding round comes as global security breaches continue to damage businesses and governments across the world while eroding consumer confidence. The most recent momentous breach, at Atlanta-based credit score and report services provider Equifax Inc., compromised names, social security numbers and home addresses of about 145 million Americans.
Menlo Park-based Cybersecurity Ventures predicts that companies and consumers will spend $1 trillion globally over the next five years on cybersecurity, a market that’s projected to grow 12% to 15% a year.
Irvine-based software security maker Cylance Inc. matched the $100 million funding benchmark last year in a Series D round led by Blackstone Tactical Opportunities.
Its software fuses machine learning, artificial intelligence algorithms, and the cloud to thwart new and evolving threats and cyberattacks before they hit servers, desktops and virtual desktops.
Cylance is ranked No. 17 on the Forbes 2017 Cloud 100.
Interconnections
The companies have more in common than the recognition, funding rounds and sector.
Cylance co-founder Stuart McClure and CrowdStrike co-founder George Kurtz established Mission Viejo-based Foundstone Inc. in 1999. The software maker, which specialized in detecting and managing software vulnerabilities, was sold five years later to McAfee in Santa Clara for $86 million in cash.
The two published a book in 1999 with industry veteran Joel Scambray on cybersecurity, “Hacking Exposed,” which is meant to help companies protect themselves. The book’s seventh edition was published in 2012.
Foundstone, before its sale, expanded its customer base to more than 400 government agencies and multiple large companies that included AT&T, McKesson and Motorola.
Kurtz spent seven years with McAfee, holding several executive roles, including worldwide chief technology officer, general manager and senior vice president of enterprise.
McAfee was acquired in 2010 for $7.7 billion by Santa Clara-based Intel Corp., the world’s largest chipmaker.
CrowdStrike co-founder Dmitri Alperovitch, who serves as chief technology officer, was vice president of threat research at McAfee, where he led global internet threat intelligence analysis and investigations.
CrowdStrike co-founder and former Chief Financial Officer Gregg Marstron held the same title at Foundstone and at Networks in Motion, an Aliso Viejo-based provider of wireless navigation services for GPS-enabled mobile phones that was sold in 2009 for $170 million to TeleCommunication Systems Inc. in Annapolis, Md.
Marstron retired from CrowdStrike in 2015 and was replaced by Burt Podbere, one of several executives based in the Bay Area. Others include Kurtz; president of global sales and field operations, Michael Carpenter; Laurel Finch, chief legal officer; and Chief Human Resources Officer Lisa McGill, according to their LinkedIn profiles. President and Chief Security Officer Shawn Henry; Alperovitch; and Adam Meyers, vice president of intelligence, are based in the Beltway.
Senior vice president of engineering Amol Kulkarni is based in the Seattle area.
Only two CrowdStrike executives among the 11 listed on its website are based in Southern California: Chief Operating Officer Carl Black and Chief Marketing Officer Johanna Flower.
