Expanse, which lets its customers know when their digital assets aren’t safe, has raised $70 million in new funding

Published April 9, 2019

Expanse, a six-year-old, San Francisco-based company that helps its clients understand and monitor what it calls their “global internet attack surface,” has received a $70 million vote of confidence from its earlier backers, as well as some notable individual investors.

Previous investor TPG Growth led the Series C round, with participation from other earlier investors that include NEA, IVP and Founders Fund. But the company also drew checks directly from Founders Fund co-founder Peter Thiel, Michael Dell, former IBM CEO Sam Palmisano, media entrepreneur Arianna Huffington and Turner Enterprise CEO Taylor Glover.

What do they find so interesting about Expanse, which was formerly known as Qadium? Its traction, for starters. It turns out that when you start indexing global internet protocol addresses before everyone else — meaning the numerical labels assigned to each device connected to a computer network — it’s hard for competitors to catch up.

Indeed, numerous big organizations, including CVS and PayPal, are among others that now use the company’s software-as-a-service to help manage their far-flung digital assets connected to the public internet. According to co-founder and CEO Tim Junio, Expanse has been tripling its sales year over year — and quadrupling the terms of its contracts. Toward that end, he says it now has more than 10 customers that have signed up for $1 million-plus contracts. “VCs like to look at how long it takes to go from $1 million to $10 million in [annual recurring revenue]. It took us 22 months, about as fast as [the now-public cloud-storage company] Box.”

Much of that revenue is also coming from U.S. federal agencies, including the U.S. Army, the U.S. Navy and the U.S. Air Force, as well as the State Department, the Defense Department and the Department of Energy. Collectively, they account for more than $100 million in contracts with Expanse, it says.

Asked if Thiel has played a role in making introductions — Thiel famously advised Donald Trump leading up to his election as president, and Thiel’s former chief of staff, Michael Kratsios, is now the country’s chief technology officer — Junio says that all of Expanse’s investors have helped in making customer introductions and pours water on any suggestion that Thiel has done special favors for the company.

Meanwhile, though the company is known for its work in helping customers identify security risks they don’t know about on their networks — like an IoT device that hasn’t been patched — it’s now going after adjacent problems that are bigger-spend problems, including looking at its customers’ critical suppliers to be sure that they aren’t introducing vulnerabilities, including across their commercial cloud providers and co-hosting facilities.

Eventually, it’s easy to see a day when Expanse sells some of the aggregated data it’s seeing, perhaps on a sector by sector basis, though Junio says that Expanse “isn’t going in that direction” currently. For now, he says, the biggest trend that’s driving the business today is the digital transformation of every type of company, which is resulting in plenty of insecurity. As more businesses move to the cloud, there is always the danger that employees — their own or those acquired through mergers — won’t always know or follow policies, and that they’ll move sensitive data where they should not.

That it’s a trend with no end in sight goes a long way in explaining the momentum of Expanse. Already, the company has 150 employees across offices in San Francisco, Washington, DC, New York and Atlanta. With its newest round — a sum that brings Expanse’s total funding to $135 million altogether — the plan is partly to move into new international markets beyond where it already operates. Those markets include the U.K., Canada, Australia and Japan.