Tiger Global leads $50m round for China's DataCloak
China-based cyber security start-up DataCloak has raised $50 million in an extended Series B round led by Tiger Global Management. Existing investors Matrix Partners China, Jeneration Capital, GL Ventures and GSR Ventures re-upped.
GL Ventures led a $28 million Series B in January featuring the other three existing investors in the latest round. This followed a $5 million Pre-Series A in 2018 led by Matrix and a Jeneration-led $13 million Series A in January 2020.
The proceeds of the new round will be used to accelerate R&D investment, product innovation, and market expansion. The company also wants to enhance customer service capabilities to meet growing customer needs, according to a statement.
Founded in 2018 by a former senior director at Baidu, Shenzhen-based DataCloak helps companies set up secure, isolated workspaces within employees’ computers and smart phones. Information flows can be controlled and later audited, while an artificial intelligence-driven detection function is able to identify abnormal behavior.
The company began commercializing its offering in early 2020 and has since served dozens of customers across financial services, high-end manufacturing, internet services, and professional services.
Last September, DataCloak introduced China’s first zero-trust security framework. Known as HyperCloak, it integrates existing IT infrastructure into a zero-trust network security architecture. The framework has been implemented by the likes of JD.com and KE Holdings. In August 2021, DataCloak introduced a solution to give companies high-speed, secure access to hybrid clouds.
"The concept of zero trust is based on the assumption that threats are everywhere and everywhere. The goal is to allow appropriate access to the right people. This concept is becoming more and more recognized and accepted, and it will also be necessary for enterprise security development and system design to follow such a trend," said Chao Liu, DataCloak's co-founder and CEO.
Data security has emerged as a prominent theme in technology investment. China’s Ministry of Industry & Information Technology estimates the domestic cybersecurity industry will be worth more than RMB200 billion by 2025. Last year, it proposed cultivating a group of companies that will achieve combined revenues in excess of RMB2 billion during this period.
For years, the standard government approach to cybersecurity has been physical separation - one set of devices for internal communication and another for internet access. This served as a prototype for the zero-trust concept, whereby vendors use virtual separation to provide convenience and security.
Google was the first to incorporate zero-trust into its cybersecurity architecture. The likes of Cisco, Microsoft, Symantec have all followed suit.
Index Capital served as the exclusive financial advisor for DataCloak's Series B extension.
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