Zero Networks Lands $55M Series C to Drive Zero Trust Growth

A microsegmentation startup led by a longtime Microsoft product manager raised $55 million to accelerate product development around identity segmentation and zero trust network access.

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Zero Networks said the Highland Europe-led Series C round will help the Orlando, Fla.-based vendor address last mile security challenges often left unresolved in traditional network security approaches. The company also plans to double its 120-person workforce over the next year and grow its footprint outside North America from 30% of sales today to 40% of sales over time, said CEO Benny Lakunishok.

“It’s preemptive, meaning we don’t have to do any fundraising,” Lakunishok told Information Security Media Group. “Essentially, the investors came to us. So it’s saving me time, plus accelerating our go-to-market worldwide because of the need.”

Zero Networks, founded in 2019, has raised more than $100 million, having most recently closed a $20 million Series C funding round in December 2023 led by U.S. Venture Partners. The company has been led since inception by Lakunishok, who had spent more than 11 years at Microsoft, which included overseeing the company’s endpoint detection and response and advanced threat protection products (see: Illumio, ColorTokens, Cisco Lead Microsegmentation Rankings).

Why Zero Networks Is Going Into Identity Segmentation, ZTNA

Lakunishok said identity segmentation is an emerging field with substantial opportunity, addressing gaps left by traditional Privileged Access Management systems. At the same time, ZTNA is the external-facing side of Zero Trust architecture, which Lakunishok said is a natural extension of Zero Networks’ existing microsegmentation platform. Lead investor Highland Europe will bring extensive regional influence.

“We started with one product, which is our microsegmentation offering, and since then, our customer base actually asked us for two more things, which are identity segmentation and zero trust,” Lakunishok said. “So we plan to expand aggressively into the identity segmentation space, which is something that’s very new, and into the existing space of ZTNA.”

While microsegmentation controls access based on network behavior, identity segmentation shifts that control to user identities, allowing service accounts and privileged users to be limited to what they need to access. The key challenge here is visibility, Lakunishok said: organizations often lack awareness of how many service accounts they have, what those accounts are doing and how to govern their behavior.

“There will be things that will have to remain open for the environment to function,” Lakunishok said. “Eighty-to-ninety percent of the problems in lateral movement are reduced by closing the network down. And then the last mile is, you have to keep open a few things and then we further sanitize which identities can do what.”

On the ZTNA front, Lakunishok is sharply critical of traditional vendors’ reliance on reverse proxies and cloud tunneling, which he describes as inefficient, costly and visibility-reducing. Zero Networks instead employs a just-in-time, peer-to-peer architecture that Lakunishok said opens ports dynamically after MFA authentication, maintaining zero trust without introducing bottlenecks or sacrificing observability.

“It’s almost peer-to-peer networking without going through someone’s cloud, which means you have the regular activity,” Lakunishok said. “It’s fast, no cost. You know that you’re not tunneling all of the traffic to the cloud, so there’s no cost and latency. Instead, zero trust ports are being opened on demand only after MFA.”

What Sets Zero Networks Apart From Microsegmentation Rivals

Lakunishok said rivals including Illumio and Akamai rely heavily on agent-based deployments and manual segmentation, which are difficult to scale and prone to failure. Zero Networks’ edge lies in its agentless design, use of existing OS-level firewalls and automation-driven segmentation model. The platform automatically learns typical behavior and applies segmentation policies with little human intervention.

“We invented a new mode of segmentation,” Lakunishok said. “Instead of opened up and closed, it will be temporarily open on demand after MFA. So with us by default, all of the risky thoughts that attacker views will be MFA, they will never be just simply opened.”

Zero Networks plans to invest in core hubs such as Japan, Singapore and Australia in APAC, “every major country” in Europe, and increase the scale of sales and support across more U.S. states to maintain momentum, Lakunishok said. Once prospects engage with Zero Networks, Lakunishok said the technical strength and usability of the platform typically lead to conversion.

The company wants to surpass $100 million in annual recurring revenue within two years, and sees geographic diversification as both a goal and leading indicator of future revenue growth. Sales efficiency metrics such as CAC payback measure how effectively Zero Networks turns investments into revenue, while low customer churn demonstrates strong customer satisfaction and product stickiness, he said.

“We just need to be everywhere, because typically, when a company knows of us and they give us a shot, they become a customer because the stuff works. It’s as simple as that,” Lakunishok said. “We just need to be in front of more prospects that have the need and we can help everyone. Simple as that.”