Zscaler Secures $38 Million Investment Round

Zscaler, the Cloud Security Company, today announced that it has secured $38 million in funding from strategic investors, including Lightspeed Ventures. The company, which has until now been exclusively funded by internal investment, is planning to use the new funding to further accelerate its go-to-market strategy with expanded sales and marketing, and further develop its cloud security offering with a high emphasis on mobility.

Zscaler has grown rapidly by transforming the way enterprises address the growing complexities of delivering security to Internet-enabled users, devices and applications that operate beyond the limits of the corporate network. The company’s singular focus on securely enabling businesses for the accelerating challenges of mobility, cloud applications and social media has yielded solid gross margins and high sales growth, turning the company cash flow positive.

“To date, we have resisted outside investment despite inquiries from top-tier investors. Our new strategic partners share our vision and are committed to helping Zscaler build a long-lasting business,” said Zscaler CEO Jay Chaudhry.

Zscaler protects over 8 million users in 160 countries with the world’s largest security cloud, enabling businesses to instantly secure users on any device, anywhere in the world with no hardware or software required. The Zscaler Security Cloud enables IT organizations to replace many different point security products with a single, cloud-delivered solution, while eliminating the need to reroute traffic to a central location or proliferate costly appliances in multiple locations.

Ravi Mhatre, managing director at Lightspeed Ventures, agrees that Zscaler provides a one-of-a-kind platform in the rapidly growing market for “beyond-network” security. “Many web security vendors are putting appliances in the cloud and calling it cloud security,” said Mhatre. “Zscaler is the only company that has the right architecture to securely enable the mobile, cloud and social media applications that often bypass traditional security altogether.”

Zscaler is a founding member of the Cloud Security Alliance, and operates the Zscaler ThreatLabZ research labs, which leverage billions of daily web transactions from millions of users worldwide to identify and alert customers of new and emerging threats as they occur. The company was recently named a leader and “most visionary” in Gartner’s Magic Quadrant report for Secure Web Gateways, and awarded a 2012 Marketing Penetration Leadership Award by Frost & Sullivan.