Vista Equity Partners has invested approximately $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 a 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 at the end of this decade. Indeed, the MDR security services market will reach $2.2 billion by 2027, representing a CAGR (compound annual growth rate) of 16.7% from 2021, according to Infinity Business Insights. MSSP Alert considers these figures to be extremely conservative.
Critical Start: Business Context of MDR Security
Critical Start has around 250 employees and is looking to grow 35% by the end of 2022, a company spokesperson told MSSP Alert.
Technologically, Critical Start’s MDR platform can automatically resolve more than 99% of security alerts, the company claims. The remaining 1% of issues can be handled by Critical Start Security Operations Center (SOC) analysts.
Critical Start’s customer base includes “hundreds” of MDR customers in the medium and large business sector, the company said. Additionally, the ARR (Annual Recurring Revenue) has increased by more than 400% over the past three years. Yet, actual customer adoption numbers, dollar revenue, and EBITDA numbers are not disclosed because the company is privately held.
Critical Start has 90 channel partners and is committed to a “100% go-to-market” model, the company said. The main technology partners are Microsoft, Palo Alto Networks, CrowdStrike, Splunk, SentinelOne and VMWare.
Prior to Vista Equity funding, Critical Start created CyberOne in November 2021. CyberOne is a value-added reseller (VAR) that generates over $100 million in annual revenue.
Critical Start MDR Funding: Insights from Management
In a prepared statement on the funding, Rob Davis, Founder and CEO of Critical Start, said:
“Our goal at Critical Start is to be the most efficient, easiest to use, and fastest to deploy managed detection and response service, and we believe this Vista investment will help us continue to expand our differentiation. in how we help protect our customers from cyber attacks.Over the past ten years, we have focused on protecting our customers from the most sophisticated cyber threats by building a premier technology platform and team. We are thrilled to partner with Vista given their team’s deep understanding of the technology and enterprise security landscape and the resources they can provide to help us continue our tremendous growth trajectory.
Added Ryan Atlas, Managing Director of Vista Equity Partners:
“Enterprises across all industries are looking for trusted vendors to help protect against the growing volume of cyberattacks, especially given the significant and growing shortage of sophisticated security talent available. Differentiated technology, 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 cost-effectively protect against cyber threats by rapid evolution.
Marc Teillon, Vista Foundation Fund Co-Head and Senior Managing Director, concluded:
“Demand for MDR services is skyrocketing as organizations of all sizes and across industries recognize the importance of 24/7/365 vigilance against cyber threats. With superior technology, trusted service and top-notch customer advocacy, Critical Start is well positioned to be a winner in the category, and we look forward to supporting Rob and the team in this next chapter of growth.
MDR and venture capital
Several MDR companies have attracted funding in recent months. For example, eSentire in February 2022 raised $325 million in funding, surpassed $100 million in annual recurring revenue (ARR), and achieved unicorn status.