Armis plans to raise a final $250 million to $300 million at a $3.5 billion valuation before pursuing an initial public offering, according to Calcalist.
The Palo Alto, Calif.-based IoT security startup expects most of the money to come from a single new strategic investor, akin to February’s private equity round that saw a $125 million investment from Brookfield Technology Partners. The company received a valuation of $2 billion at the time of its $125 million funding round, meaning Armis’ market cap has increased by 75 percent in just eight months.
Some of the proceeds from Armis’ latest round are expected to be used to acquire other companies, Calcalist reported. Armis is believed to already be in negotiations with several acquisition targets for deals that could each cost several tens of millions of dollars, according to Calcalist.
The entire $250 million to $300 million investment is set to enter company coffers and won’t be used in secondary deals, Calcalist reported. The round is set to be completed in the coming weeks and will see a much higher valuation than February’s investment due to investors’ willingness to pay a premium to acquire a stake in Armis, Calcalist said. Armis didn’t immediately respond to a CRN request for comment.
Armis was founded in 2015, employs 465 people and has prior to the latest round raised $300 million in total funding, according to LinkedIn and Calcalist. The company was acquired by private equity giant Insight Partners in February 2020 for $1.1 billion, which included a $100 million investment from Google-backed venture capital fund CapitalG into the company.
The company disclosed in February that its revenue had grown by more than 750 percent over the past two years while its customer base–which includes Sysco, Fresenius Medical Care, Home Depot, Mondelez and Oracle–had increased by more than 425 percent. Armis CFO Jonathan Carr said in February that the company is on track to double its business again in 2021.
Co-founder and CEO Yevgeny Dibrov told CRN in February that he intends for Armis to become a publicly traded company through an initial public offering. Carr, meanwhile, told CRN at the time that Armis was “working towards being public-ready,” noting that the company was already “well-funded and well-backed.”
“An IPO is something that we’re excited about, but it’s certainly not something that we necessarily feel like we need to do from a funding perspective,” Carr told CRN in February.
In April 2021, the company hired Recorded Future, SentinelOne and Cylance channel veteran Tim Mackie to grow international sales and repackage Armis’ training curriculum. Armis tasked Mackie with strengthening its presence outside North America and modifying the company’s partner certification program to create a more tiered approach based on engagement level.
Armis was traditionally a direct sales company, but since the start of 2020 has sought to build out a channel sales motion, highlighted by the hiring of longtime Forescout sales leader Brian Gumbel as chief revenue officer in October. Between 70 percent and 80 percent of Armis’ sales went through the channel as of April 2021, Mackie said, with historical accounts making up much of the direct business.
Mackie said in April that he’d like to see Armis eventually conduct at least 95 percent of its business through the channel. Armis as of April had just under 200 channel partners globally, which included a mix of distributors and prominent security brands like Optiv and GuidePoint as well as capable small and midsize solution providers, according to Mackie.
“I’m honored to be here. It’s a terrific company and a terrific organization,” Mackie told CRN in April. “I’m at the right place at the right time.”