Island Gets $175M Series D Funding, Doubles Valuation to $3B – Source: www.databreachtoday.com

Endpoint Security

Investments in Island Led by Coatue and Sequoia Support Global Expansion, R&D, M&A

Michael Novinson (MichaelNovinson) •
April 30, 2024    

An enterprise browser startup led by ex-Symantec President and COO Mike Fey closed its Series D funding round to expand internationally and examine potential acquisitions.

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The Dallas-based company said the $175 million investment led by Coatue and Sequoia Capital will allow Island to expand in continental Europe and the Asia-Pacific region as well as strengthen browser-based capabilities around anomaly detection. Island got a $3 billion valuation in conjunction with the funding, double the $1.5 billion market cap associated with the company’s $100 million Series C round just six months ago.

“For us, global expansion is here,” Island CEO Fey told Information Security Media Group. “And it’s something we’re happy to do. And that requires a much bigger company to start to tackle beyond North America. And we wanted to make sure that we had the resources required to do it right.”

Island has received $487 million since emerging from stealth in February 2022, but Fey said the company has to date spent just $130 million building business infrastructure and capturing marquee customers. Despite having a war chest in excess of $350 million, Fey said, the Series D will ensure Island has enough firepower to address customer demand while providing resources for global expansion along with R&D (see: Island Raises $100M to Embrace Anomaly Detection, Go Global).

From $1.5B to $3B in Just Six Months

Fey said Island’s valuation has doubled since October 2023 thanks to significant growth, key customer acquisitions and a more favorable macroeconomic climate. Although Palo Alto Networks moved into the space in December via its $458.6 million buy of Talon, the scale and complexity of the enterprise browser space and Island’s multiyear head start on R&D serve as barriers to meaningful competition, he said.

Island plans to increase its revenue from outside the United States from less than 15% today to more than 30% by the end of 2025 by going after opportunities in Germany, Benalux, Australia, Singapore, India and Japan. Fey said Asia-Pacific has compelling use cases around virtual desktop infrastructure reduction and call centers, and it faces greater costs back-hauling traffic to U.S. or European clouds.

Although Island is early in its strategic planning process for potential M&A, Fey said acquisitions could help the company integrate more capabilities into its platform along with boosting the user experience. Any acquisitions made by Island will contribute primarily to product functionality and won’t be executed to add revenue or customers, according to Fey.

“Having the cash makes it so when we find something, we can move quickly,” Fey said.

Handling Malware With Aplomb

Native R&D spend will go toward making the browser resilient in malware-ridden environments, fueling automation and integrating AI for anomaly detection, reporting and compliance. Feedback from clients has played a pivotal role in shaping Island’s product development, particularly for features that displace existing tools in areas such as virtual desktop infrastructure, mobile device management and web filtering.

From a metrics standpoint, Fey said, Island is focused on maintaining high annual recurring revenue growth and new customer logo addition along with maintaining a positive company culture with low attrition. Island also wants to further educate the chief information security officer community on what an enterprise browser can offer aside from better security, according to Fey.

“We definitely welcome providing that education on what it is because the preconceived ideas around a secure browser or data leakage – they often are wildly inaccurate,” Fey said.