Cyber Security Penetration Testing Leader NetSPI Secures $90 Million in Growth Funding Led by KKR

Investment to Fuel Innovation and Growth, Including Global Expansion and Product Innovation

Minneapolis, Minnesota  –  NetSPI, the leader in enterprise penetration testing and attack surface management, today announced it has raised $90 million in growth funding led by KKR, with participation from Ten Eleven Ventures. The investment will be used to further accelerate NetSPI’s rapid growth by expanding the company’s cyber security and client experience teams, investing in product innovation, and deepening operations across U.S. and international markets.

“The reality is that cyber security attacks today are inevitable and put organizations at grave risk,” said NetSPI President and Chief Executive Officer Aaron Shilts. “At NetSPI, we strive to stay one step ahead of hackers, breaches, and bad actors by focusing on prevention-based security techniques. Rooted in the founding tenets of the company, our goals are purposely aggressive to help our clients adapt to the constantly evolving threat landscape.”

Since its founding, NetSPI has focused its services to help companies proactively defend themselves from cyberattacks through a robust and innovative technology platform, allowing NetSPI’s team of experts to thoroughly identify security vulnerabilities. At a time when cyber security spending is expected to exceed $200 billion per year by 2024, according to a recent Bloomberg Intelligence (BI) report, more companies are preparing to fend off sophisticated cyber-attacks and avoid reputational and business risks.

“Our clients rely on us to help secure their ever-evolving attack surface by leveraging our expertise in cloud, red team, application, and network security,” continued Shilts. “This investment from KKR and Ten Eleven Ventures allows NetSPI to better meet this demand while simultaneously fueling growth and innovation as a leader in the booming cyber security market. With our investors’ support, NetSPI will continue to transform the industry with a focus on attack surface management, enterprise security testing, and vulnerability management.”

“NetSPI has built a differentiated suite of tech-enabled services and test orchestration and reporting software that is not only enhancing cyber security for complex global enterprises across a wide range of industries, but is simultaneously disrupting the traditional penetration testing market in order for these enterprises to continuously test their applications, networks, and cloud infrastructures at scale,” said Ben Pederson, Principal at KKR. “We are excited to invest in NetSPI’s growth as they build and deliver these critically important offensive security solutions.”

Jake Heller, Head of KKR’s Technology Growth team in the Americas, added: “Aaron and his team have a deep appreciation for the needs of their customers and the increasing demand for best-in-class, tech-enabled cyber security systems.”

KKR is investing in NetSPI through its Next Generation Technology Growth Fund II. KKR and Ten Eleven Ventures have invested in market-leading cyber security companies including Darktrace, KnowBe4, Ping Identity, Cylance, ForgeRock, and ReliaQuest.

“Penetration testing is a critical component of any enterprise’s security program and will continue to be an important part of compliance and regulatory requirements in the future,” said Mark Hatfield, General Partner, Ten Eleven Ventures. “With its deep expertise and automated platform, NetSPI has developed an incredibly effective and efficient approach to penetration testing and attack surface management. We’re thrilled to partner with this exceptional team and look forward to drawing on our cyber security expertise to help NetSPI bring its technology to more companies across the globe.”

After spending its first several years as a bootstrapped, profitable business, in 2017 NetSPI partnered with Sunstone Partners, who has been instrumental to the company’s growth post-investment. Gus Alberelli, Managing Director of Sunstone Partners, said: “We’re incredibly fortunate to partner with NetSPI’s team and proud of the company’s extraordinary growth stemming from its technology-enabled penetration testing team. We are excited for KKR and Ten Eleven Ventures to join Sunstone Partners in supporting NetSPI’s growth journey.”

The investment is the latest transaction in a period of accelerated growth for NetSPI. Most recently, NetSPI acquired Silent Break Security and incorporated its proprietary Adversary Simulation and Red Team Toolkit software into the company’s offensive cyber security and attack surface management offerings. In 2020, NetSPI launched Penetration Testing as a Service (PTaaS) powered by its Resolve™ platform. Upcoming additions of risk scoring, vulnerability intelligence, breach and attack simulation, and more will continue to differentiate NetSPI’s technology offerings.

Goodwin Procter LLP advised NetSPI on the transaction and Latham & Watkins LLP advised KKR and Ten Eleven Ventures.

About NetSPI

NetSPI is the leader in enterprise security testing and attack surface management, partnering with nine of the top 10 U.S. banks, three of the world’s five largest health care companies, the largest global cloud providers, and many of the Fortune® 500. NetSPI experts perform deep dive manual penetration testing of application, network, and cloud attack surfaces, historically testing over 1 million assets to find 4 million unique vulnerabilities. NetSPI offers Penetration Testing as a Service (PTaaS) through its Resolve™ platform and adversary simulation. NetSPI is headquartered in Minneapolis, MN and is a portfolio company of private equity firms Sunstone Partners, KKR, and Ten Eleven Ventures. Follow us on Facebook, Twitter, and LinkedIn.

About KKR

KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life, and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Ten Eleven Ventures

Ten Eleven Ventures is the original venture capital firm focused solely on investing in digital security. The firm invests globally and at all stages, from seed to growth (the latter via its Joint Investment Alliance with KKR). Since its founding in Silicon Valley in 2015, Ten Eleven Ventures has raised nearly $US 500 million and invested in 30 leading cybersecurity companies including KnowBe4, Darktrace, Twistlock, Verodin, Cylance, and Ping Identity. For more information, please visit www.1011vc.com or follow us on Twitter @1011vc.

About Sunstone Partners

Sunstone Partners is a growth-oriented private equity firm that makes majority and minority investments in technology-enabled services and software businesses. Recently recognized as one of Inc.’s 2020 PE 50 founder-friendly private equity firms for entrepreneurs, the firm seeks to partner with exceptional management teams, often as their first institutional capital partner, to help accelerate organic growth and fund acquisitions. Founded in 2015, the firm has $800 million of committed capital to its first two funds. For more information, visit www.sunstonepartners.com.

Media Contacts:
Jean Hill, Maccabee PR for NetSPI
jean@maccabee.com
(612) 294-3154

KKR
Cara Major or Miles Radcliffe-Trenner
Media@KKR.com
(212) 750-8300

Ten Eleven Ventures
Megan Dubofsky
mdubofsky@1011vc.com
(917) 576-5590