Mobile Security Company Lookout Bags $150 Million in Venture Capital Funding
Lookout is a fast growing mobile security company based in San Francisco. In what was the largest funding round for a security company in 2014, the company received an infusion of $150 million from venture funds and investment bankers. It is the largest tranche of investment that the company has got till date, which has brought its total investment to $280 million.
Lookout is a worldwide leader in mobile security and it has a customer base of more than 50 million people. Most of them are paying customers. The company is planning to use the funds to reach out to big enterprises, to develop new products and improve its marketing efforts.
The lead investor in the funding round was T. Rowe Price Associates and others who invested include Goldman Sachs, Morgan Stanley Investment Management, Accel Partners, Bezos Expeditions, Khosla Ventures, Andreessen Horowitz and Index Ventures. Morgan Stanley, Goldman Sachs, Bezos Expeditions and Wellington Management Company, LLP have invested for the first time in the company.
Effect of market concerns on mobile phone security
The deal may be a reflection of market concerns on cyber security, specially on mobile devices which are becoming ubiquitous. The rise in the number of internet connected mobile devices also means that there is an increase in employees using mobile devices to access sensitive company information and other information.
Lookout has developed algorithms for predictive analysis, a cloud-based security platform and is using machine learning to keep track of application use on mobiles as well as to catch anomalous and malicious behavior. The company's software is able to counter security risks even before they can harm devices, networks and data.
Industry experts have predicted that attacks on mobile devices will increase as more people start using mobile in lieu of personal computers. The recent attack by a Russian gang on 420,000 websites in which more than 1.1 billion user names/passwords and 450 million email addresses were stolen is a grim reminder of how vulnerable the internet is.
Data theft and cyber security has become a major headache
Lookout has found that in the United States, the amount of money lost to cyber crime is twice the amount of money invested in security technology. In spite of the best efforts of government agencies worldwide, cyber crime has outpaced security efforts. The latest big scale attack by the Russian hackers follows a series of hackings at major United States retailers like target, Neiman Marcus and others.
Ajay Royan, a co-founder at Mithril Capital Management, which is an investor in Lookout said that data security has become a challenge and anxiety over data security is fueling a demand for security solutions which promise control as well as transparency.
The founders of Lookout, John Hering, James Burgess and Kevin Mahaffey are former hackers. So in a way the circle has finally come around. After all, who can be better placed to ferret out the weakness of a system than former hackers?