Vista Equity Partners has invested roughly $215 million in Critical Start, a Top 250 MSSP and provider of managed detection and response (MDR) cybersecurity services. The deal reinforces growing interest in the MDR market, and surfaces one day after Vista Equity sold Datto to Kaseya, which is backed by private equity firm Insight Partners.
Demand for MDR security is expected to remain strong late into this decade. Indeed, the market for MDR security services will reach $2.2 billion by 2027, which represents a 16.7% CAGR (compound annual growth rate) from 2021, according to Infinity Business Insights. MSSP Alert believes those figures are extremely conservative.
Critical Start: MDR Security Business Background
Critical Start has roughly 250 employees and is looking to grow by 35% by end of 2022, a spokesperson for the company tells MSSP Alert.
On the technology front, Critical Start's MDR platform can automatically resolve over 99% of security alerts, the company asserts. The remaining 1% of issues can be handled by Critical Start's security operation center (SOC) analysts.
Critical Start's customer base spans "hundreds" of MDR customers in the midsize and large enterprise sector, the company indicated. Moreover, ARR (annual recurring revenue) has grown by more than 400% in the last three years. Still, actual customer adoption figures, revenue dollars and EBITDA figures are undisclosed since the company is privately held.
Critical Start has 90 channel partners and is committed to a "100 percent" channel go-to-market model, the company indicated. Key technology partners include Microsoft, Palo Alto Networks, CrowdStrike, Splunk, SentinelOne and VMWare.
Ahead of the Vista Equity funding, Critical Start spun off CyberOne in November 2021. CyberOne is a value-added reseller (VAR) that generates more than $100 million in annual revenue.
Critical Start MDR Funding: Executive Perspectives
In a prepared statement about the funding, Rob Davis, founder and CEO of Critical Start, said:
“Our goal at Critical Start is to be the most effective, easiest to consume, and quickest to deploy Managed Detection and Response service, and we believe this investment from Vista will help us continue to expand our differentiation in how we help protect our customers from cyber-attacks. For the past ten years, we have been laser focused on protecting our customers from the most sophisticated cyber threats by building a best-in-class technology platform and team. We are thrilled to partner with Vista given their team’s deep understanding of the enterprise technology and security landscape and the resources they can deliver to help us continue along our tremendous growth trajectory.”
Added Ryan Atlas, managing director at Vista Equity Partners:
“Across every industry, enterprises are seeking trusted providers to help protect themselves from the increasing volume of cyber-attacks, particularly given the large and increasing shortage of available sophisticated security talent. Differentiated technology, working together with their expert service and support teams, makes Critical Start the managed solutions provider of choice for organizations looking to improve their security posture and protect themselves cost-effectively against the rapidly evolving cyber-threats.”
Concluded Marc Teillon, co-head of Vista’s Foundation Fund and senior managing director:
“The demand for MDR services is soaring as organizations of all sizes and across all industries recognize the criticality of 24/7/365 cyber threat vigilance. With superior technology, trusted service, and best-in-class customer advocacy, Critical Start is well positioned to be a winner in the category, and we look forward to supporting Rob and the team on this next chapter of growth.”
MDR and Venture Capital
Multiple MDR companies have attracted funding in recent months. For instance, eSentire in February 2022 raised $325 million in funding, surpassed $100 million in annual recurring revenue (ARR) and achieved unicorn status.