SentinelOne launches $100 million fund to invest in security and data startups
The cybersecurity company’s initial portfolio includes several Israeli startups, among them Torq and Laminar
Israeli-founded cybersecurity company SentinelOne announced that it is launching a $100 million fund named S Ventures to invest in security and data startups.
SentinelOne, co-founded by Tomer Weingarten almost 10 years ago, said S Ventures will provide access to company experts and leaders, enhanced exposure across the SentinelOne ecosystem, and product integration and GTM enablement.
SentinelOne’s initial portfolio includes several Israeli startups, among them: Torq, which accelerates complex threat response workflows through a no-code security automation platform, and Laminar, which delivers a cloud data security platform that discovers, protects, secures, and monitors sensitive data in the cloud.
SentinelOne, which went public on the New York Stock Exchange last year, currently has a market cap of around $7.5 billion, losing almost two-thirds of its value since peaking in November of last year.
However, the company’s results in the second quarter were extremely promising, with revenue more than doubling to $102.5 million. The annualized recurring revenue (ARR) also jumped 122% to $438.6 million. The company also improved its GAAP gross margin from 59% of revenue to 65% last quarter, but operationally it is still losing money.
Operating loss amounted to $108 million, however, this is an improvement in the rate of loss out of the revenues compared to the corresponding period in 2021 - when revenues were $46 million and operating loss was $68 million.
“We delivered hyper-growth and outperformance across all aspects of our business in Q2 - ARR, revenue, customer growth, net retention, and margins,” said CEO Tomer Weingarten. "We have also seen that there is more cost awareness among customers and a rethinking of IT budgets, which has led to lengthier sales cycles."
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During the quarter, SentinelOne also began to consolidate the American company Ativo in its reports, which was acquired in March for $600 million in cash and shares. The acquisition brought SentinelOne into the enterprise identity management market, one of the hottest markets in cyberspace today. Post-acquisition, SentinelOne is competing head-on not only with CrowdStrike, but also with Okta, another cyber giant that is considered the strongest player in the identity management market. Even after the purchase, SentinelOne still had $1.2 billion left in its bank account.
With the acquisition, SentinelOne added 300 new employees to its team, and its total workforce is almost double what it was a year ago. Weingarten addressed the issue and noted that the company plans to continue recruiting employees in the coming year as well. "It is not possible to grow over 100% without increasing the workforce, we are taking into account the uncertainty in the markets, but we will continue to recruit employees because we are seeing a return on the investment."
