Singapore state investor Temasek Holdings has led a $550 million extended Series C round for Los Angeles-based Orca Security, bringing the cloud security provider’s valuation to $1.8 billion.
Other investors that participated in the financing include US hedge fund Lone Pine Capital and Splunk Ventures, the venture arm of data analytics firm Splunk.
Orca first drew interest from Temasek a few months ago after closing the first tranche of its Series C round in March, its chief executive and co-founder Avi Shua told DealStreetAsia. The company had then raised $210 million in the round, which valued it at $1.2 billion.
Orca will use part of the proceeds from its latest round to expand in the Asia Pacific, which currently generates 20% of its revenue. It counts Hitachi Solutions and Japanese buy now, pay later firm Paidy, which was recently acquired by PayPal, as clients.
Having a long-term investor such as Temasek on its cap table with a wide network, especially in the Asia Pacific, will be beneficial for Orca on its growth journey, Shua added.
Orca plans to open offices in Japan, Australia, and Thailand in the next two to five months. It plans to hire around two dozen employees – mostly security and cloud infrastructure engineers – in the region by the end of 2022.
The cloud security company also plans to expand in the UK and the rest of Europe as well as the Middle East.
Founded in 2019, Orca claims it is able to protect cloud infrastructure built on platforms such as Amazon Web Services, Microsoft Azure, and Google Cloud within minutes and without companies needing to install software or network scanners. Typical cybersecurity software installations are “invasive,” can take months and cause delays, Shua said.
Orca charges its customers on the number of employees using its services. It has grown its revenue 800% year-on-year and achieved unit economics profitability although it is not profitable at the moment, Shua said.
One of Orca’s backers is CapitalG, a growth fund of Google’s parent Alphabet. Given that Orca protects Google’s cloud programme, funding from the tech giant has allowed the smaller firm to sell its product and access customers with Google.
Cybersecurity spending has increased amid rising digitalisation and remote working. Gartner predicted that worldwide spending on information security and risk management technology and services will grow 12.4% to reach $150.4 billion in 2021.
Spending on cloud security will grow by 41.2% – the largest growth of all market segments, although it is also the smallest segment – to $841 million this year from $595 million in 2020.
Orca was founded in Israel but is now headquartered in Los Angeles. Its $210 million round was led by CapitalG and Redpoint Ventures, with participation from existing investors GGV Capital, ICONIQ Growth and angel syndicate Silicon Valley CISO.
Orca’s Series C round came followed a $55 million Series B round last December, and a $20.5 million Series A round in May last year. Orca competes with the likes of cybersecurity giant Palo Alto Networks, which threatened to sue Orca last year after the latter published a video comparing the two companies’ products.