Investing in Stellar Cyber

Here at Valley Capital we are beginning a series of posts that will offer a brief look into portfolio companies that get us excited and we believe are changing the world. For more of these posts, follow us on LinkedIn @ Valley Capital Partners, and to learn more visit us at www.valleycapital.vc.

When we think about areas where the application of data at the onset of a companies life to solve big problems at scale are likely to emerge, a major point of focus is and continues to be cybersecurity. In every medium-to-large company or MSSP’s IT department analysts have too many consoles to monitor, too many alerts to respond to, and too much manual data correlation to spot complex attacks. This situation leaves companies with an unenviable choice – spend a fortune on “good enough” security or risk costly attacks. In order for a company to win when tackling a massive opportunity like this, we knew it would likely require a combination of AI, machine learning, data, and novel technology to create a solution that wasn’t simply marginally better than the next.

A sober reminder of just how large of a problem breach detection and response is the recent Marriott announcement of a massive security breach that affected 500 million customers’ data going back as far as 2014. The Marriott hack joins a list of breaches to hit the hospitality industry in recent years. Security analysts say the industry is a ripe target for criminal actors because of the wealth of financial and other information flowing through payment and reservation systems. [Axios]. Given the volume and sensitivity of personal data taken, and the length of the breach, Marriott has the potential to trigger the first hefty G.D.P.R. fine.

Enter Stellar Cyber

Stellar Cyber is on a mission to redefine breach detection and response in cybersecurity with big data and machine learning. The company has invented the industry’s first Pervasive Breach Detection System (PBDS) with AI and Distributed Security IntelligenceTM, empowering organizations to proactively detect and thwart attacks on their critical data systems before damage is done. Stellar Cyber’s innovative approach pervasively collects and analyzes complete and contextual data with zero blind spots across networks, servers, applications, and intelligence feeds.

Stellar Cyber was founded in 2015 by Aimei Wei (Senior VP of Engineering) on a mission to transform security operations. Aimei knew from working at companies like Cisco and Nortel, there was a cybersecurity data overload problem, and wanted to change the conversation from analyzing data to correlating incidents. She wanted to democratize cybersecurity solutions to eliminate that dilemma by bringing AI and machine learning to bear on the problem. She first invented a family of cybersecurity sensors suited for a variety of customer environments.

Unlike most other cybersecurity sensors, these sensors index security metadata at ingestion, ensuring from the beginning that there is a means to normalize and enrich any data source to simplify making correlations. This allows our platform’s AI engine to quickly spot anomalies across the kill chain. Stellar Cyber’s sensors deliver visibility across cloud, SaaS, applications, users, endpoints and network, and integration with all popular security tools ensures that no part of the security landscape is ignored. Stellar Cyber’s patented XDR Kill Chain™ loop and Incident Management dramatically reduce risk while dramatically reducing costs.

But that’s enough of the technical speak. Aside from the technological advantages and product differentiation the company has over existing market players, the most exciting part of Stellar Cyber is the world-class team and the depth of expertise they bring to this market. Our partner at Highland Capital Partners says it best, when he wrote that “Stellar Cyber offers the industry’s first Open XDR platform, and the only one that truly accepts security data from all tools and sources as well as its own sensors. A broad range of enterprises and MSSPs are deploying the Stellar Cyber platform at the center of their security operations because it shortcuts the time and effort to find in-progress cyberattacks or rogue insiders at work while fundamentally solving the problem of too many non-productive alerts.”

The founding team are the experts and pioneers of the network security market and bring over 20 years of experience from industry leaders such as NetScreen, Juniper, Fortinet and Palo Alto Networks. In fact, the core team comes from NetScreen, the pioneer and market leader in network security. Several customers have already called Stellar Cyber “NetScreen 2.0.” This recognition has earned Stellar Cyber distinct advantages in the enterprise and banking sectors since many customers remember NetScreen with great admiration and respect.

Feng Deng, Founder and CEO of NetScreen (IPO in 2001, acquired by Juniper for $4.6B USD) and currently a General Partner at Northern Light Venture Capital (www.nlvc.com), led Stellar Cyber’s Series Seed round and participated in Stellar Cyber’s Series A, which we led.

What’s Next for Stellar Cyber?

Stellar Cyber recently announced that they raised $38 million in an oversubscribed Series B funding round led by Highland Capital Partners, with full participation from all existing investors including our team here at Valley Capital Partners, SIG and Northern Light Venture Capital, and new strategic investor Samsung. This new round brings Stellar Cyber’s total funding to over $68 million, and positions them for continued rapid growth. With rapid growth across the world in enterprise and powering 14 of the top 250 managed security service providers (MSSPs), Stellar Cyber is poised for market leadership for years to come.

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