After bootstrapping its way to product-market fit, Ottawa-based cybersecurity software and services startup Field Effect has secured $41 million CAD ($30 million USD) in Series A financing.
Field Effect, which specializes in “intelligence-grade protection” for the “vastly underserved” small and medium enterprise (SME) market, plans to use this capital to boost its sales and marketing efforts as it expands its presence across North America and Europe.
Field Effect co-founder Matt Holland previously spent seven years working as a security researcher with the CSE, where he specialized in intelligence tradecraft.
“Our rapid customer growth and industry-leading customer retention rates are a testament to the fact that we have a winning product-market fit,” Field Effect co-founder, CEO, and CTO Matt Holland told BetaKit. “The next phase of growth will be to secure as many SMEs as possible.”
Prior to launching Field Effect, Holland spent seven years working as a security researcher with the Communications Security Establishment (CSE), the Government of Canada’s national cryptologic agency, where he specialized in intelligence tradecraft.
According to Holland, Field Effect was “born out of decades of experience in cyber security projects with Five Eyes nations and years of [research and development].”
New Jersey growth equity investment firm Edison Partners led the all-equity, all-primary September round, providing about $27 million CAD of the total funding, with support from other undisclosed strategic investors. This round marks Field Effect’s first round of external funding to date.
Field Effect’s flagship product is a holistic cybersecurity platform for cloud, network, and devices, called Covalence. Field Effect’s software provides managed detection and response services to SMEs, and is sold both directly to companies and through existing information technology (IT) partners, to a customer base that spans North America and the United Kingdom.
Covalence uses advanced analytics, machine learning, and the expertise of security analysts to monitor, detect, and responds in real-time to cyber threats.
Field Effect also provides simulation and cybersecurity training to companies and SMEs, large corporations, universities, and government agencies through its cyber range.
Founded in 2016, Field Effect was financed by Holland up to this point. With this round, the company has taken a similar approach to fellow Ottawa-based tech firm Evidence Partners in bootstrapping its way to a sizeable first funding round at a post-seed stage.
Field Effect represents the second cybersecurity company Holland has launched: he sold the first, Linchpin Labs, to Florida-based aerospace and defense tech firm L3Harris in 2018.
According to Edison Partners general partner Lenard Marcus, who is joining Field Effect’s board of directors as part of this round, the SME market for cybersecurity is “vastly underserved” given that most security tools are built with large enterprises in mind.
“Currently, many SMEs either have to operate without proper protection, and struggle to manage overly complex tools, or spend beyond their means for cyber security—Field Effect addresses those needs,” Marcus told BetaKit.
Field Effect currently has over 170 employees. To support its growth, the startup plans to grow its team to 500 by the end of 2024, with additions in leadership, sales, marketing, technical, and operational roles.
Feature image of co-founders Matt Holland and Andrew Loschmann, courtesy Field Effect.