Boulder-based security intelligence company LogRhythm just announced a $40 million round, bringing their total amount raised to over $76 million. Founded in 2003 by Phillip Villella and Chris Peterson, LogRhythm is a provider of log management, security information and event management solutions for organizations. The company has grown to about 300 employees under the leadership of President and CEO Andy Grolnick.
Grolnick, who is a veteran of Boulder-based open source support company OpenLogic, sat down with Built In Colorado to give Coloradan techies the lowdown on LogRhythm's growth plans and product strategy down the line:
An IPO is on the horizon
“Our approach from the beginning was to actually raise relatively small amounts of capital as we were refining our products,” Grolnick said. “As we matured and had success, that’s when we raised more capital and we really put it to work. Now we are taking the opportunity to bolster the balance sheet for more flexibility and stability. Ultimately, we are just executing our vision to build a large standalone enterprise security software company. The next step for us, down that line, would be an IPO.”
This is good news for Colorado tech, which had a decade-long drought in big tech IPOs. It ended thanks to Rally Software’s breakout IPO in April 2013 at $84 million and then Mercury Payment Systems followed suit this April with a $100 million IPO.
LogRhythm will keep up its same growth rate
Although Grolnick declined to share revenue numbers, he did say that growth in terms of sales has accelerated in the last 12 months. LogRhythm has about 300 employees worldwide, 200 of which are based in Colorado. 40 of those 300 employees have been hired in last six to nine months and 50 more will be added to the team in the next nine to 12 months, Grolnick said.
Raising funding from outside Colorado is only getting easier
Grolnick said he admires several other great Colorado tech companies in the same growth stage as LogRhythm who have helped to bring national attention to Colorado.
“It helps when companies like Sendgrid, Rally and Datalogix reach a certain scale, then it’s easier to get the attention of outside investors,” Grolnick said. “In earlier stages, it seems harder to attract investors outside of Colorado because many of them on the coasts have so many opportunities in their backyard. More and more investors are getting smart and starting to recognize Colorado.”
Riverwood Capital, Adams Street Partners, Grotech, Access Venture Partners, Siemens and High County are among LogRhythm’s investors.
LogRhythm is laser-focused on its unified product
LogRhythm’s competitors include HP, IBM and Intel, but this Colorado company is looking to give the big guys a run for their money.
“It’s not a new challenge or a new dynamic,” Grolnick said. “When innovation is valued, companies like us can compete against the HPs and IBMs of the world.”
Medium and large enterprise clients highly value LogRhythm’s Security Intelligence Platform, which unifies SIEM, log management, file integrity monitoring, network forensics and host forensics.
“We hear repeatedly from customers that they like that we are laser-focused on our offering,” Grolnick said. “The product line that we compete with is just a very small part of what these bigger companies do.”
Meanwhile LogRhythm is maintaining its core values
First and foremost, LogRhythm keeps customer feedback top-of-mind. By placing customer service and support teams in Colorado, the whole team gets constant, direct feedback: “That’s just the fundamentals: customer needs drive improvements. Customers have been a key cultural tenant from the beginning,” Grolnick said.
With an achievement-oriented and customer-focused company culture, a collaborative team is key for LogRhythm as it grows.
“One of the areas of struggle is always finding good talent. As we are growing, we’ve been fortunate enough to find a lot of great people because at the end of the day, it comes down to people.”