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Webroot latches on to $108 million in VC funding Dawn Kawamoto CNET News.com February 6, 2005 Webroot Software is expected to announce Monday that it received a whopping $108 million round of venture funding--another sign that venture capitalists are laying down big bets on security technology. Webroot, an antispyware developer, received its venture round from Accel Partners, Mayfield and Technology Crossover Venture Partners. The funding round far exceeds the $45 million raised by e-mail security appliance vendor IronPort, which ranked among the top VC investments last year. "Webroot's round is an incredibly large round, considering the size of rounds today," said John Gabbert, research director for VentureOne. "Security has been a hot topic over the last several years, as corporations try to protect information as much as possible." Webroot is the maker of Spy Sweeper, a line of antispyware applications. In recent years, spyware has mushroomed, with as many as 90 percent of U.S. home computers infected at some point. Spyware programs secretly monitor a user's PC activity and can note keystrokes and glean passwords. Users often do not realize they have spyware on their systems, because the programs typically arrive bundled with freeware or shareware, or they're sent secretly via e-mail and instant messages. Webroot plans to use the funding to increase its sales to large corporations, which currently account for about a third of its business, said David Moll, Webroot's chief executive. In the next 18 months, Moll said, he hopes companies make up 50 percent of Webroot's business and consumers the remainder. Moll also plans to defend Webroot's position in the antispyware market as new entrants from Microsoft to Symantec make a push in retail stores. Webroot plans to use some of the funding proceeds to locate an office in Asia, Moll said. The company is based in Colorado and has five offices in Europe. Although Webroot has managed to fund its own operations since its founding in 1997, Moll said it was time to seek outside investments and he chose the path of venture capital, rather than going public. "We felt we could be capital constrained...to address all the opportunities that are out there," Moll said, adding that the venture capitalists will bring more to the table than just money. He noted the VCs, with their deep contacts, can help the company find the 100 new employees it expects to hire over the next year from sales to marketing. With the funding round, Moll does not expect to need any additional money in the near future. But he hasn't ruled out an initial public offering down the line. "We're not ready to be an IPO company right now," Moll said. "But this partnership with the VCs will help us become IPO ready." |
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