Sassy

In the pre-cloud computing era, IT resources were hosted in data centers and most corporate activities took place at company offices. Enterprises would traditionally put perimeters around their assets whereby any authorized user inside the network could access the resources while external intruders were kept away — a “castle-and-moat” approach. The few remote workers would use VPNs to securely connect to the network servers.

The emergence of cloud computing technologies dismantled the castle-and-moat security architecture as more workloads and corporate sensitive data were migrated to the cloud. Organizations rapidly adopted SaaS applications and cloud infrastructure products that were hosted in locations outside of corporate network perimeters. Further, the rise of remote and hybrid work environments meant that company assets, users, and sensitive data were distributed far and wide. As a result, the zero-trust security model was introduced, under the concept of “never trust, always verify”.

In the zero-trust framework, VPNs are replaced by Zero Trust Network Access (ZTNA) which allows remote users to securely connect to authorized internal corporate applications only. Organizations also typically use other zero-trust-based network security technologies, such as Cloud Access Security Broker (CASB), which sits between users and cloud vendors to provide visibility into all cloud applications and enforce data security policies; Secure Web Gateway (SWG) to protect users against internet-based threats, Firewall as a Service (FWaaS) to filter malicious network traffic, and Software-Defined Wide Area Network (SD-WAN) products that connect remote users and branches to cloud applications and other enterprise locations by routing traffic directly to the cloud instead of first backhauling it to the data centers.

Cybersecurity companies are increasingly converging all these network security functions into a single, cloud-delivered platform known as Secure Access Service Edge (SASE; pronounced “sassy”).

Interest in single-vendor SASE offerings has been growing rapidly, since buyers are increasingly preferring unified offerings. Indeed, Gartner estimates that the SASE market will reach over $25B in 2027, expanding at a CAGR of 29%.

Major players in the single-vendor SASE space include Palo Alto Networks (EV = $110B), Fortinet (EV = $57B), and Zscaler (EV = $25B).

In the private market, however, Netskope has emerged as the leading contender:

* Founded in 2012

* 3,500+ customers worldwide (>30% of the Fortune 100)

* 8 years in a row in the Cloud 100 ranking, and recognized as a leader in the Gartner Magic Quadrant for several years

* Estimated revenue of over $500M in 2024

* Backed by $1B of total equity from Social Capital, Accel, ICONIQ, Lightspeed and Sapphire

* Last valuation at $7.5B (Sep 2021)

Conclusion

Fabrica Ventures Fund II has recently invested in Netskope at a meaningful discount over the last round.