Investment Gives Bain Controlling Stake in Managed Detection and Response Provider
Bain Capital has led a $190 million investment into a managed detection and response provider founded by a former National Security Agency computer operations expert.
The Boston-based private equity giant said the funding will support further development of Blackpoint’s security technology and enable its MSP partners to combat a constantly changing threat landscape. The Baltimore-area company plans to add additional products to its platform to simplify the security stack for its MSP partners. Private equity firm Accel also participated in the Blackpoint growth investment (see: Expel, CrowdStrike, Red Canary Dominate MDR Forrester Wave).
“A lot of companies take too much money too young at too high a valuation, and when interest rates go up, evaluations come down massively, and now they need their next check,” Blackpoint founder and CEO Jon Murchison told Information Security Media Group. “We wanted to make sure all that was in a row so we could make a really calculated bet we thought we could deliver on.”
Blackpoint was founded in 2014, employs 126 people and has raised $201.4 million in three rounds of outside funding, according to IT-Harvest and Crunchbase. The company previously raised money from Adelphi Capital Partners, Telecom Ventures, Pelican Ventures and WP Global Partners in 2018 and 2020. The investment gives Bain a controlling interest in Blackpoint, with Murchison retaining a minority stake.
Securing the Cloud and International Customers
Murchison wants to expand the breadth and scale of Blackpoint’s technology suite in areas such as cloud interrogation and hardening technology, where both adversaries and defenders are still figuring out what’s possible. He also wants to increase Blackpoint’s footprint outside North America from 20% today to 30% a year from now by addressing customer needs in Australia, Europe and the Middle East.
“Our stack is way more cost effective and way more effective in real life against actual cyber threats,” Murchison told ISMG. “There’s a reckoning coming. As budgets get tighter, people are looking at your level of efficacy. I think we’re going to see a major disruption in the security stack over the next few years.”
Murchison started Blackpoint after spending more than 10 years executing high-priority national security missions with the NSA. Blackpoint’s MDR technology detects and isolates threats at the earliest sign of a breach, while the company’s Security Operations Center looks to eliminate alert fatigue and time spent on false positives by investigating suspicious activity and taking action to neutralize threats in real-time.
“Blackpoint sets itself apart as the security service of choice for MSPs with its next-gen MDR technology and integrations to detect and actively respond to threats,” Bain Capital Partner Dewey Awad said in a statement. “We are thrilled to join Jon and the management team to help accelerate the growth of the business and drive new product development that delivers a unique value proposition to MSPs.”
Emphasizing Efficient Growth
Blackpoint has introduced a managed application control tool to help MSPs ensure that only authorized applications are running on devices and reduce the risk of unauthorized activity or malware infiltration. The company also launched a learning platform this year to provide MSPs with access to sales and technical cybersecurity training and lessons from the military, intelligence and business communities.
Small- and medium-sized businesses have become the new surface area for cybercriminals given their inability to deal with threats in-house, said Accel’s Nate Niparko, Christine Esserman and Graham Hutson. These resource-strapped organizations often lean on managed service providers to administer their cyber programs, which in turn has made cybersecurity even more central to the MSP offering.
“We have tremendous admiration not only for ‘what’ Blackpoint has built, but ‘how’ the business has been built to date: with a humble, relentless focus on the customer and without any emphasis on hype or fanfare,” Accel wrote in a blog post. “The Blackpoint team is deeply focused on product and has never leaned into the temptation of ‘growth at all costs.'”