Network security startup ExtraHop skips and jumps to $900M exit

Last year, Seattle-based network security startup ExtraHop was riding high, quickly approaching $100 million in ARR and even making noises about a possible IPO in 2021. But there will be no IPO, at least for now, as the company announced this morning it has been acquired by a pair of private equity firms for $900 million.

The firms, Bain Capital Private Equity and Crosspoint Capital Partners, are buying a security solution that provides controls across a hybrid environment, something that could be useful as more companies find themselves in a position where they have some assets on-site and some in the cloud.

The company is part of the narrower Network Detection and Response (NDR) market. According to Jesse Rothstein, ExtraHop’s chief technology officer and co-founder, it’s a technology that is suited to today’s threat landscape, “I will say that ExtraHop’s north star has always really remained the same, and that has been around extracting intelligence from all of the network traffic in the wire data. This is where I think the network detection and response space is particularly well-suited to protecting against advanced threats,” he told TechCrunch.

The company uses analytics and machine learning to figure out if there are threats and where they are coming from, regardless of how customers are deploying infrastructure. Rothstein said he envisions a world where environments have become more distributed with less defined perimeters and more porous networks.

“So the ability to have this high quality detection and response capability utilizing next generation machine learning technology and behavioral analytics is so very important,” he said.

Max de Groen, managing partner at Bain, says his company was attracted to the NDR space, and saw ExtraHop as a key player. “As we looked at the NDR market, ExtraHop, which […] has spent 14 years building the product, really stood out as the best individual technology in the space,” de Groen told us.

Security remains a frothy market with lots of growth potential. We continue to see a mix of startups and established platform players jockeying for position, and private equity firms often try to establish a package of services. Last week, Symphony Technology Group bought FireEye’s product group for $1.2 billion, just a couple of months after snagging McAfee’s enterprise business for $4 billion as it tries to cobble together a comprehensive enterprise security solution.


By Ron Miller

Material Bank, a logistics platform for sourcing architectural and design samples, raises $28M

Material Bank, a logistics platform for the architectural and design industry, has announced the close of a $28 million Series B financing today, led by Bain Capital Ventures. Bain’s Merritt Hummer led the round on behalf of the firm and will join the board of directors at Material Bank, along with Jeff Sine, cofounder and partner at The Raine Group.

Existing investors Raine Ventures and Starwood Capital Group cofounder, Chairman and CEO Barry Sternlicht also participated in the round.

Material Bank launched in January 2019, founded by Adam I. Sandow. Its platform is meant to serve designers, architects and others who source and purchase the very building blocks of our physical world: materials.

Most architectural firms and designers have their own physical library of materials in their office, like carpet swatches, wall covering samples, tiles, and hardwoods for flooring. These libraries are nearly impossible to keep up to date — not only do styles change over time (just like clothes or anything else) but architects pull this or that binder of wall coverings or carpets and there’s no telling if or when that binder returns to the library, or if the binder will still be complete when it does return.

The other big obstacle for designers and architects is that there’s no real aggregation across the many, many manufacturers of these materials.

Sandow likens it to searching for a flight in the old days.

“We all used to book airline travel through an agent, and then the airlines offered websites,” said Sandow. “We thought ‘this is great! I can just go to AA.com or Delta.com to book my flights.’ Until we wanted to price shop. Then you had to search four or five different websites and write down all the prices and by the time you found the price you wanted, it may be gone.”

Then came Expedia and Hotwire.

That’s how Sandow thinks of Material Bank for the architectural industry.

Material Bank aggregates materials across hundreds of vendors, giving users the ability to filter around multiple parameters to find a selection of materials in minutes instead of hours.

But aggregation and powerful search are only half the battle. Designers and architects are also burdened by the time it takes to get their samples. One package may arrive tomorrow, with two others in the next three days, and still more coming in one week.

This leads to a confusing experience of getting all these samples together to show a client, and is a huge environmental waste with dozens of boxes arriving at the same exact location over several days.

To combat this waste, Material Bank built a facility in Memphis directly next door to FedEx’s sorting center. This facility is the very last stop that FedEx makes each night before sorting and sending off its overnight packages by plane.

That means that Material Bank users can place an order by midnight EST and get their samples, from any vendor on Material Bank, by 10am ET the next morning. These samples come in a single box with a tray that can be repurposed into a return package to send back unneeded samples.

Obviously, Material Bank’s facility would require hundreds of workers to turn around orders that come in late to be picked up by FedEx if it weren’t for advancements in robotics. Material Bank partners with Locus Robotics in its facility, and is thus able to pay $17.50 an hour to its human workers in the building.

Sandow says that coronavirus has not hampered the business at all, with the company seeing record revenues in March and with expectations to beat that record in April. That is partially due to the fact that those physical sample libraries in architectural and design firms are no longer accessible to employees who have had to shift to working from home.

Material Bank doesn’t charge architects or designers for the service, but does have a hybrid SaaS model in place for manufacturers and vendors on the platform. Manufacturers pay a monthly fee to access and use the platform, listing their SKUs, as well as a transactional fee to get access to the architects and designers placing orders for samples of their materials. Essentially, the manufacturers pay for the lead generation and hand-off to potential customers.

Sandow spent the last two decades growing a media network of architectural and design-focused magazines and knew early on that a reliance on advertising wouldn’t cut it as media moved online, with plans to build tools and services instead.

Material Bank was born out of that effort, and spun out of Sandow group relatively early on in its life.

The company has raised a total of $55 million since inception.


By Jordan Crook

72 hours left on early-bird savings for TC Sessions: Mobility 2019

We’re totally stoked to see all of you at TC Sessions: Mobility 2019 on July 10 in San Jose, Calif. That’s slightly less than a month away, and if you want to save on the price of admission, you need to play beat the clock. Early-bird pricing ends on Friday, June 14 at 11:59 p.m. (PT).

That’s a hundred bucks, people. Why pay more? Buy your early-bird ticket now and save that Benjamin for a rainy day.

TC Sessions: Mobility 2019 is a day-long conference focusing on the current and future state of mobility and transportation. More than 1,000 members of these communities — founders, technologists, engineering students and investors — will gather to learn, share, demo and network.

TechCrunch editors will interview some of the best minds and makers in mobility and transportation — the people making it happen. They’ll look at the promises, expose the hype and address the complex challenges inherent in these revolutionary industries.

Autonomous vehicles are a hot topic, and you’ll hear a lot on that subject. We can’t wait to hear from Jesse Levinson, co-founder and CTO of Zoox. He oversees the company’s software, artificial intelligence, computing and sensing platforms. He’ll talk with us about the company’s deployment plans and the challenges ahead.

The jam-packed agenda includes some of the transportation industry’s biggest names. Folks like Seleta Reynolds of the Los Angeles Department of Transportation, Ford Motor CTO Ken Washington, Mobileye co-founder and CEO Amnon Shashua, Karl Iagnemma of Aptiv, Alisyn Malek with May Mobility and Dmitri Dolgov at Waymo.

What’s happening with mobility investment? We’ve got that covered, too. You’ll hear from Michael Granoff (Maniv Mobility), Ted Serbinski (Techstars) and Sarah Smith (Bain Capital).

Here’s another way to experience TC Sessions: Mobility 2019. Buy a demo table. You won’t find a better place to showcase your mobility startup to a more targeted, influential audience. We’re talking founders, investors, technologists and media. The price includes three attendee tickets for extra ROI.

TC Sessions: Mobility 2019 takes place July 10 in San Jose, Calif. It’s time to play beat the clock. Early-bird pricing ends in 72 hours on Friday, June 14 at 11:59 p.m. (PT). Buy your ticket today and save $100.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility? Contact our sponsorship sales team by filling out this form.


By Emma Comeau