Colorado’s Webroot Buys CyberFlow Analytics, Expands in San Diego

Not long after ViaSat (NASDAQ: VSAT) acquired San Diego-based LonoCloud in 2013, former LonoCloud executives Tom Caldwell and Hossein Eslambolchi met for coffee at the Specialty’s Café and Bakery in University City.

Eslambolchi, who had served as a LonoCloud advisor and CEO, told Caldwell he had an idea for a cybersecurity startup that would use analytic software and machine learning technology to monitor the data flowing in and out of networks for anything that looks out of the ordinary. Caldwell said they soon raised $600,000 from angel investors to start what would become CyberFlow Analytics.

And now CyberFlow Analytics is part of Webroot, a private cloud-based cybersecurity provider based in Broomfield, CO, a suburban community between Denver and Boulder.

“This is a good next chapter for the [CyberFlow] product,” Caldwell said. Financial terms were not disclosed. In the three years since it was founded, CyberFlow raised at least $4 million from investors that include Toshiba America Electronic Components, Siemens Venture Capital, and angel investors.

In a statement today, Webroot said it has acquired CyberFlow’s assets, enhancing its “ability to address the explosion of Internet-connected devices and an increasingly complex threat landscape.” The buyout also fits neatly with the strategy for differentiating itself through “radically different” products that Webroot CEO Dick Williams outlined for Xconomy several years ago.

Caldwell said Webroot has “a good healthy revenue stream, and they’re profitable.” Webroot also plans to expand in San Diego, and Caldwell said he plans to stay on. (Eslambolchi, a former AT&T chief technology officer, was serving as CyberFlow’s executive chairman.)

After acquiring San Diego-based BrightCloud in 2010, Webroot has grown to about 60 employees in San Diego, where work is focused mostly on engineering and product development.

Webroot recently moved into new office space in the University City area, and plans to add most of CyberFlow’s 15 employees, Webroot’s Chad Bacher said last week. The company has over 500 employees in offices around the world, said Bacher, who is Webroot’s senior vice president for product strategy and technical alliances.

San Diego represents a major growth area for Webroot. “This is really the technology hub for our machine learning and threat intelligence services,” Bacher said.

“CyberFlow is really good at finding things that don’t look right, but what we didn’t have was [broader] context. And Webroot’s threat intelligence service provides that context,” said CyberFlow CEO Steve Nye.

The San Diego office is going to become one of Webroot’s centers of analytic software, Nye added. “For us, it’s a great opportunity to make a bigger mark in town besides cybersecurity. This is ‘leaning forward’ cybersecurity.”

Asked to explain, Nye said, “The machine learning and advanced analytics here is very forward leaning. It enables us to move toward more of an AI-based, next-generation cybersecurity.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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