Future Cybersecurity Tech & How Coro Is Using Its $100m Series D Money

next speaker just closed a $100 million series D we usually don't celebrate funding but I'll celebrate the funding here because he's also very transparent he's a natural teacher we're going to dive into the story the security SAS space today and how he's broke 50 million bucks of ARR please tell me welcome to the stage dra lure of k.net Jor it's great to have you again thanks for being back come on up here um did I get the numbers right it was $100

million series d the series D was 100 million total raised so far was just north of 280 and the valuation on the series D was about how much um the Press has conf has stated that we don't state it publicly but the Press said it was 750 MH and uh and they were pretty close okay press is generally generally close so 750 okay great let's go back to the origin story so you got going I mean when do you guys when was the first line of code written for k.net would you say

the first line of code like the MVP uh 2014 2014 so we still see like pretty small Revenue up to really like it looks like 2019 here right what took so long to get to revenue that's a great question um so we are a cybercity company for those of you who don't know we Target mid-market and small businesses and uh initially you like that right I love that throw back I love that I love those colors still to this day I think orange is my favorite color from a branding perspective I got

overruled by my partners uh but basically we started off like every other cyber security company uh trying to sell a niche product into the Enterprise Market very quickly understood that that market was um uh not very uh receptive to new ideas um started um really morphing the product got uh the product to be a lot more complete continued to sell to the Enterprise and then I remember the board

meeting where I presented on a big graph saying here's where we are selling here's who's buying maybe we should sell there and what was there this was uh mid-market and small businesses midmarket and small okay that really love the Simplicity that we uh created that really led the whole concept of an all-in-one so we slowly grew the product from a very Niche product to a platform that covers basically everything that a midmarket or a small business needs try and ignore everything you've learned over the past years because I want

people to like get get in your head in this moment of time when you pick push on this website the thesis was that you were selling what was it to to to to police group it was uh trying to uh so so the attack Vector was called com jacking which uh is a name I actually coined and the whole concept was preventing a man- in the- Middle attack uh on in the wireless realm so either Wi-Fi or cellular it's very very easy for an attacker to step in the middle and basically intercept all the traffic

and then either manipulate the traffic steal the traffic or whatever and uh yeah so when we went to sell this people said oh that's a great technology we had patents we won awards and everything but uh but people said it's too much of a such a specific Threat Vector uh that it wasn't really um they weren't willing to spend money to prevent it it's not about just a spending the money they weren't willing to add one more thing to the stack I see that's a very um when you

look at it from the eyes of uh Chief Information Security Officer or an IT person adding something new to a stack has additional costs mhm uh which is why cyber secur is so broken MH uh because you need to have layers and layers and different tools an average company on the Enterprise side will have 40 different cybercity products that they've bought each one of them has a massive um side cost not just the cost of the software but the team the training the the uh the uh maintenance

and so for and so on let's push this forward and I want people to take a snapshot in their head so they can follow along with the story right so this is the funding history right first off you had three co-founders I think right uh three co-founders other than me so four total did you guys do the easy thing 25 each yep fair enough he owns it 25 each was it a simple as that you're like okay Pizza beer 25 feels right let's go it it was uh we all brought so much to the table so it was clear that each one of us has equal value and therefore we should have equal share and

you're running for president soon I am running foral very I'm saying very very political answer but no it is what it is but okay so anyways you start with 25 25 and then you're first seed round series a 5.5 million 2016 I mean most people were selling 20% in their seed round would you fair was it around that just around that yeah okay so that was like called like a 20 million valuation you were still though pre a million 2 million of AR in 2016 right in 2016 we were zero zero okay yeah yeah so you don't really do that big round until

2018 20 million and if we go back to the revenue graph we still see basically no zero or zero in that range what was being valued at the time was it the patents um it was both the patents and the potential okay because we started Focus we I think we really showed that the potential was phenomenal um smbs are the least protected um animal in the in the business world and if you wanted to know

how big that opportunity is we can ask this audience I think all of you are what we would consider smbs under 2,000 employees how many of you actually have endtoend cyber security that you can trust uh covering your devices the network the cloud the email and the data yeah no some people three people by the way for the rest of you 40% off on cororo if you go to k.net SAS openen oh he's a I've rarely meet an engineer that

can sneak in a sales pitch at the same time that was very good do it one more time because it was so good coral.net SAS openen 40% off on our entire I love that that's great all right so but but here's an interesting thing every body in this room will spend easily 50 bucks a user on CRM but they won't spend $15 a month on Cyber SEC until they get hacked and pain until it's too late right you're selling you have that's the problem with what you sell right is you got to sell that pain and no one will pay for until they feel the pain so let's talk about the story though right so you're going from this you learn you

learn you learn 2015 2016 you learn you learn okay now this is the new messaging 2017 yes so basically in 2017 we created this all-in-one MH uh that covered basically um Extended what we've originally done so we were very much in the network space then we extended it to SAS on the one end and to the device on the other end and we launched it in uh 2017 we called it secure cloud and that's really the the uh the time where we noticed

that the Simplicity the concept of all-in-one was really uh attractive to the ICP that we weren't even considering MH the midm market the small business uh you know um 20 to 2,000 employee range uh which you know all four Founders come from the Enterprise world and to us this was a uh sort of like an epiphany that there was a market and they were buying and they were interested so you keep learning from [redacted phone] now this is

what your website looks like in 2019 feels more enterpris right less words less colors more direct right using Office 365 G Suite Dropbox you know plug Us in uh let's go forward you keep learning you keep learning here's what you look like now in 2021 you've expanded the industries you're serving Healthcare manufacturing which of these six sort of Industries was making up the most of your Revenue in 2021 do you remember uh actually I would say pretty equally distributed one of the things

we're super proud of is the fact that uh we are very evenly spread across verticals so we're not exposed in any way to a specific vertical tanking or something like that like uh uh and we've all had our battles cars where you sell into Financial Services and then 2018 happens and everything gets uh shut down uh so we're very proud right now uh we see two specific spikes uh and this is where you're at today right so you're trying to Brand this idea of sort of

modular cyber security as a brand yeah correct so right now we're seeing two spikes in education and in automotive uh and that's because these two industries have suffered a significant amount of attacks in the last couple of years so they were waking up to their reality and understanding that they need to make that investment and we made that investment extremely easy for them to make yeah because it's an allinone it's 15 bucks a month for the entire platform per user very easy to digest I mean from a consumer

perspective I'm most concerned about Automotive cyber security because I'm terrible I always think about worst case scenario but again I drive a Tesla and they brag about the fact they can push updates any night but I'm also like crap if anyone wanted to kill me they would hack Tesla and drive my car off a cliff while I'm in it uh if you do that times a million cars on the road at the same time that's like a major terrorist attack waiting to happen yeah so I mean could that actually happen or are you seeing enough protocols in place with these iot devices our uh security doesn't cover iot it covers the what we

call the workspace the user the device to use the network they're connected to the cloud services the email the data MH uh we're not touching um iot that's a totally different world of security I see which most of the people here probably don't even touch yeah all right we've got we got three four minutes left I want to jump into your capitalization history right so you talked about early stages here you do the series see 80 million 500 million post money valuation in 20122 the thesis around that round was what why' you need that that amount of

money in 2022 so if if you go back through the uh Revenue growth you'll see that suddenly we started growing at uh 3x uh so you mentioned before 3X 3X 3X 2x 2x so we did five years of uh 3x and then uh this year is going to be our first 2x year cuz the base number has become this projection of 100 million this year are you where are you today like you're on track okay wow so yeah going from 50 to 100 million in today's SAS Market that's pretty incredible so

you use that to drive growth you keep doing fundraising right because you obviously did the series D 75 million and the series Z it was a Series E for 100 million right or was it no the series D was uh 100 million uh there is an error here the series C was actually 155 so together yeah it's it's sort of like a two uh so the 80 million at 500 and the 75 at 600 were actually the same round just two different it's C1 C2 I see I see okay what I want to get into

though uh and I didn't ask you for this and it's gon to make you uncomfortable so I apologize but just roll with it um I I've modeled um I've modeled your cap table did not ship my Kevlar vest yes but it's important and I know you're open and I think you'll talk about it most people won't talk about this so I have to take the opportunity but this is I believe what your cap table looks like so there's some key assumptions here I made the assumption that your four co-founders all own 2 % at the start so you see that in the upper right right you doron carmell and guy and then I assumed 20 20% sold in the 2014 series

uh seed which you confirmed earlier and then some of these other metrics are already public like we know you sold 16% in the series C we just got confirmation on the series e of about 133% sale if all this is true you've been diluted down to about an 8% stake in the company assuming there was no top up or ESOP pool are you in that range today so there there were top UPS along the way because it's important to the investors to make sure that the founders stay very engaged and that's the way a smart investor thinks yes that's one thing but

the second thing is I'm not really worried about dilution at all because I much rather own um 5 8% of a 10 billion do company rather than 30% of A10 million company yes but this is what all the early employees at Hoppin said and then it Crash and Burn and all options are upside down and the employee number two gets no money so like that's not an option for us well that's my question for you right so if you see my you see my sort of ugly text in the bottom left right as you raise more Capital your options for exiting decrease there's

less buyers that will pay that amount of money so how do you turn you're you're this you have not just to be clear he has not confirmed this I am guessing his onp paper net worth based off the percent on the top I put on the bottom but I'm guessing on paper net worth for cor is around 50 60 million bucks the question is for you personally like how do you turn this into actual Cold Hard Cash is IP your only option have you done any secondaries yeah so from my perspective and and I can speak for my other co-founders as well because we're all on the same page with that uh we're

not all that interested in uh shooting for an exit we're interested in shooting for A10 billion Revenue uh AR company uh because the market is massive so we're looking at a market that we uh The Tam uh is about $ 1110 billion dollar in our market and we want to be the dominant player in that market so we're much more interested in building the largest the

most uh successful company in mid-market small business cyber security rather than thinking about an IPO or or an exit and I think that our uh funders uh also view it that way because that exit will come if we build that massive organization we've got about a minute left uh have you or anyone on your team talked to Google's m&a team and anytime in the past 12 months no none so they just pulled out of a massive cybercity

acquisition they never talked to you guys about I'm not sure they pulled out you think way pulled out whiz whiz pulled out I I jokingly I said we should uh rename Coro wza because apparently Google buys wz uh companies whiz ways from Israel wait why do you think whiz pulled I thought Google probably pulled out why do you think whiz pulled out so the official line is that whiz really wants to do an IPO that's what their CEO

is saying um we have no in inside information whatsoever so what I know is what you know from the Press what do you think wiz's revenue is I think it was uh 230 230 million so I mean you're not you're half that size yeah we're not that far they were valued at Google was thinking 23 billion yeah so you think you can make a fair argument you're worth 10 billion today the company I uh if if we're half of what they are and our offering is actually W much wider

and our Tam is much bigger than theirs then I'd say that would be fair taking the spotlight off of you for a second you guys can see here the reason I like building these graphs when a research team does research at get Latka is you can see sort of the series a position of 5.5 million assuming the delution happens the way the waterfall shows you can see they they've effectively more than you know 15 20x their position to be worth effectively 91 million today up up from the 5.5 million or the series B went from 20 million to now with 47 million today so it's just fun to understand sort of how this works to your point Point again I put in some

ESOP topups here you did that pretty much in every round some sort of ESOP topup uh for us and for all of the employees as well yeah we want to keep everybody engaged we want to make sure that people are uh with a View to a personal success as well yep uh guys it is not easy to be this transparent but again launched with ugly orange and green colors back in the day into the completely ug I they're pretty ugly orange yellow or orange and yellow pretty ugly but not a designer so you get a pass 2015 very little Revenue

to 2018 2019 patents issued finally pivoted the business you grow from nothing you 3x you 3x you 3x you're going to double this year at scale from 50 to more than 100 million bucks of Revenue also just a great guy super transparent please help me give it up for drawer at cororo thank you man that was awesome thanks for letting me push you a little bit