From Seed to Exiting Big, in 2 Years: Palo Alto Networks Acquires Team8 Portco Dig Security
When I first heard Dig Security’s pitch, I recall saying to my team – this is a deal we should pursue. It ticked all the boxes: a big market opportunity, differentiated superior technology, and a team with a wealth of experience. Little did I know that we were entering one of the most competitive categories in cybersecurity, with literally dozens of vendors vying for the same market share.
Given the fierce competition, and as Dig’s story unfolded, our pride in what we were achieving grew stronger. Dig rapidly claimed market leadership, spearheaded innovation in the field, witnessed rapid revenue growth, and had a profound impact on enhancing customers’ security posture. The vision of creating a prominent, industry-leading company to tackle Data Security challenges for modern enterprises was becoming more achievable than ever. This is why our celebration of this exit is bittersweet. However, an acquisition valued at approximately $350 million when the company is just 2 years old is an incredible accomplishment for everyone involved – founders, employees, and investors alike. We’ll be cheering on Dig’s next chapter from the sidelines as its innovation scales to serve thousands of customers, thanks to the incredible reach of our friends at Palo Alto Networks.
I’m delighted to share some highlights from our swift, enjoyable, and rewarding journey with Dig.
Unique Team: Second-Time Founders with an Insider’s View of Cloud Security
Founders Dan Benjamin (CEO), Gad Akuka (CTO), and Ido Azran (VP R&D) bring a unique blend of prior startup successes and extensive experience in cloud architecture and security. My journey with Dan and Ido began in 2006 during our shared military service in the IDF cyber intelligence and technology Unit 8200. I only got to know Gad as part of Dig’s journey, but heard of his work as founder of Segasec, acquired by Mimecast. I’ve closely followed their impressive careers with deep admiration. Ido founded Crossense, acquired by Toluna, and Dan led engineering at IdMlogic, acquired by CA, and then held leadership roles with both Google’s and Microsoft’s cloud organizations. We quickly realized this team brings strategic product and market expertise in cloud security and an insider’s view of the gaps in the industry from two of the three leading cloud providers.
Big Market Opportunity: Data Security for the Modern Enterprise
Data Security is not a new category, but as the enterprise technology stack has evolved from on-premises to the cloud, a new approach was needed, one to provide a comprehensive solution, covering all the terrains where data resides: cloud infrastructure (IaaS), cloud platforms (PaaS), cloud applications (SaaS), as well as the legacy on-premise data stores and applications. The traditional Data Security vendors have failed to address the challenges of these new and emerging terrains.
As cloud adoption continues to soar, fueled by the ongoing data and AI technology revolution, data security in the cloud has become a top priority for CISOs. Given the heightened risk to data stored in the cloud, our prediction was that Data Security would become a much larger market, with its growth rate increasing significantly. Judging by Dig’s millions in revenue within its two years of existence, and other developments in the market, our assumptions were right.
Innovation in a Competitive Market: DSPM Meets DDR
In recent years, the Data Security Posture Management (DSPM) category has gained traction and recognition in the industry, with numerous DSPM vendors emerging to address the evolving needs of enterprise cloud security. However, having the right technology and a fresh approach to the market enabled Dig to rise as an award-winning, clear market leader. Their product stands out by addressing the dynamic aspect of cloud data security beyond static risks.
DSPM capabilities primarily focus on static risk assessment, including identifying sensitive data, classifying it, and reviewing access controls and configurations. However, these capabilities fall short in the face of modern threats. For instance, according to IBM, it takes an average of 207 days for companies to identify a data breach and another 70 days to contain it. Meanwhile, an authorized user can download a database in seconds.
To address this gap, Dig introduces unique Data Detection and Response (DDR) capabilities, which use real-time log analytics to monitor cloud environments and detect data risks as they unfold. In the era of increasing cloud-based attacks, Dig stands out as the first and only solution that combines DSPM with real-time DDR, delivering a comprehensive solution that assists in discovering, classifying, protecting, and governing cloud data. Dig’s DDR is pioneering, providing proactive protection for data in public clouds: it records data source access, issuing real-time alerts and additional protective measures in response to suspicious or anomalous activity, effectively thwarting cyberattacks, data exfiltration, and misuse. Dig’s detection engines, informed by deep security research, neutralize attackers without requiring enterprises to create and maintain complex policies.
The market has embraced this innovative approach, and in just two years, Dig has risen to prominence as the leading product in the DSPM and DDR categories. With customers from around the world and millions in revenue, they have established themselves as a key player in the industry.
Team8 CISO Village In-Action: Dig Wins the CISOs’ First Choice
We’re proud to have provided Dig with unique access to the market through the Team8 CISO Village, a global community of prominent CISOs from leading enterprises, including many Fortune 500 companies. This unique CISO community has been instrumental in Dig’s success, which engaged with over 120 villagers who qualified for Dig’s ICP (ideal customer profile). We had the pleasure of featuring Dig in many of our events, with a significant milestone being their recognition at our last 5-day CISO Summit in Tel Aviv, where they won the CISO Village Choice Award. See Dig Security’s 8-minutes presentation, leading to their win:
The Team8 CISO Village is just one example from the collective effort of the Team8 platform team, providing comprehensive support and operational expertise across go-to-market, business development, sales acceleration, marketing, community, human resources, finance, and operations.
Collaborative Effort: A Powerful Syndicate of Industry Leaders
At Team8, we are fortunate to have led the Seed Round for Dig, working closely with its exceptional founders and leadership team, from the very beginning to this successful exit, being the company’s largest shareholder.
We were joined by incredible A-Round lead investors and trusted partners: Nir Polak, founder and chairman at cyber unicorn Exabeam (and its CEO until recently) and Jonathan Lim, Partner at Signalfire. We couldn’t ask for better partners to join us for this journey and support Dig’s success.
Dig also had the good fortune to build a strategic syndicate with prominent industry leaders joining as investors: Crowdstrike, Okta, CyberArk, and Samsung (all close partners to Team8, some are even LP investors of ours).
This powerful syndicate was joined by additional key investors, including Felicis Ventures, Merlin Ventures, Onnivation, CyLon, Cyverse Capital, and many angel investors.
Thank you to all the partners who supported Dig’s journey!