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Apart from Zoom and perhaps now Roblox, it would be hard to name a company that has blown up more over the past difficult year than Snyk.
The developer-security startup announced a $300 million E round on Wednesday – it’s second mega-round in six months, following a $200 million fundraise in September – to take it to a $4.7 billion valuation. That’s four times what the Boston company was worth in the beginning of 2020.
The new funding round, led by Accel Partners and including household names of tech like Google and Salesforce, makes Snyk the most prominent company in a nascent, but booming, sector of tech.
The round announced Wednesday included “primary offerings” – shares purchased by investors directly from Snyk – and “secondary offerings” – shares purchased from other investors. Wednesday’s round includes $175 million in primary capital, raising Snyk’s total primary capital raised to $470 million.
The company’s name, pronounced “sneak,” comes from “sneaking” security into the early process of software development, and because SNYK is an acronym for “so now you know.” Snyk promises to help companies create secure applications easier and faster.
No matter how you pronounce it, Snyk is now the biggest company in developer security, the cybersecurity sector that helps companies grow faster and more securely by giving software developers tools and computer code that speed up production and prevent security issues later on. Every company had to adapt over the past year, and that often meant developing new software.
CEO Peter McKay says Snyk adopted a mantra that perfectly fit the tumultuous COVID-19 economy: “‘Be ridiculously easy to do business with’ is one of our core values,” McKay told Insider on Wednesday. “It’s embedded in our company culture.”
By providing APIs (application programming interfaces) that integrate its tools into companies’ operations, Snyk has managed to help companies move fast – and has propelled its own skyrocketing growth, McKay says. “That approach has helped us grow from a small, scrappy software security company into an industry leader,” McKay says.
And many analysts and investors are now looking ahead to a Snyk initial public offering. Developer security-related companies Splunk, New Relic, PagerDuty, and JFrog have all gone public in recent years, and the startup-analyst firm PitchBook says more are on the way.
“Leading cybersecurity VC investors have achieved a first wave of exits benefiting from this cultural shift and are doubling down on the niche,” says Brendan Burke, an emerging technology analyst at PitchBook.
Snyk is preparing for a potential IPO, but not anytime soon
Snyk announced auspicious personnel moves pointing toward an IPO on Wednesday, including Jeff Yoshimura as the new chief marketing officer and Erica Geil as the new chief information officer. Two new well-known board members, Michael Scarpelli, chief financial officer of Snowflake, and Ping Li, a partner, at Accel were also announced.
The new team members will help Snyk “to the IPO and through the IPO in becoming a public company,” McKay says. But he’s not in any hurry.
“It won’t happen this year,” McKay says. “Many of us come from a public company, and we know what it’s like to be a public company. “There are things we want to make sure we have in place.” He said Snyk may pursue more acquisitions. Last year the company closed strategic acquisitions of startups DeepCode and Manifold.
Snyk is riding a major wave
McKay, a former VMWare exec, took over as Snyk CEO in 2019 after serving on its board for several years. The firm was founded in 2015 by Guy Podjarny, a former chief technical officer of Akamai, Danny Grander, and Assaf Hefetz.
Seed investor Ed Sim of Boldstart Ventures became Snyk’s first investor in October of 2015 after Podjarny told him a prophecy that has since become an industry catchphrase. “He said, ‘I think everything is going to shift left, empowering and securing developers earlier in the process.’ I said, ‘Here’s a check.'”
“Shift left” is now one of the driving philosophies in cybersecurity, as the industry tries to prioritize safe computer code in the development process in order to head off major attacks years later. “This whole concept of shift left has blown up,” says McKay. “We’ve been saying it for 5 and a half years, when nobody was talking about it. Now everybody’s talking about shift left.”
McKay says his company wants to work with them all. “We’ve made it really easy to work with us because it really matters to us. The experience for our customers and for the 2.2 million developers we serve is the most important thing.”
The way to make the world safer from major cyberattacks is to build safer applications in the first place, quickly, to keep pace with change, McKay says. “We believe there is an exponential, generational opportunity still in front of us.”