Cyber Security Firm LogRhythm Setting Tempo for March to an IPO
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clients detect potentially dangerous activity obscured by the millions of activities that occur across their networks each day.
An example would be spotting a suspicious log-in attempt from a foreign country where the company doesn’t have an office or do business, or a series of attempted logons that indicate an orchestrated attack.
But companies and government agencies with sensitive information and networks to protect don’t want to learn that after the fact. LogRhythm’s strategy is to develop programs that can immediately identify something suspicious, and take actions to protect a network.
LogRhythm’s software also helps companies meet increasingly complex compliance laws and regulations.
Clients that LogRhythm can publicly reveal include Bank of the West and NASA, and it serves such specialized industries as banking and finance, retail and hospitality, and healthcare industries.
In the past month, LogRhythm bolstered its board by adding Dick Williams, president and CEO of Webroot. Webroot is a cyber security company based in Broomfield, CO, between Boulder and Denver. Like LogRhythm, Webroot’s formative years were spent in Boulder, and it remains a private company.
Williams has experience leading emerging IT companies to IPOs or acquisitions. He led Webroot’s restructuring, and guided the company’s new focus on developing cloud-based security applications for mobile and businesses.
LogRhythm asked Williams to come on board to give it more seasoned executive management as it navigated the next stages of its growth, Petersen said. The company also appointed Robert Lentz to the board in May Lentz is the former deputy assistant secretary of defense for cyber, identity, and information assurance and was the department’s chief information security officer. LogRhythm hopes to expand its sales to the government, especially to the Department of Defense and other agencies focused on national security, and recruited Lentz to help in those areas.
LogRhythm’s prospects for going public or securing a very lucrative exit have enticed VCs. Since its founding in 2003, the company has raised $31.4 million from investors. Much of the early money invested in LogRhythm has come from the Colorado offices of Access Venture Partners, Grotech Ventures, and High Country Venture. Siemens Venture Capital and Adams Street Partners joined later rounds, including the $15 million Series D round the company closed last year.
The money poured in after several years of bootstrapping, which included Petersen selling his house and using the money to finance the company.
LogRhythm claims to be the largest independent company in the event and log management security segment. While that’s an achievement LogRhythm’s proud of, the key word in that sentence might be “independent.” LogRhythm’s competitors are some of the biggest names in the IT industry, including Hewlett-Packard, IBM, and Intel. They’ve built their businesses by snapping up LogRhythm’s competitors.
“We’re competing against the big boys,” Petersen said.
Accordingly, LogRhythm will focus on the classic startup strategy of continually improving and developing products, staying nimble, and offering better service. “This is all we do, unlike the larger companies, where it’s a small percentage of their revenue,” Petersen said. “This is all we do, so we have to excel at it, and we do.”