Why We Invested in Stellar Cyber, Open XDR for enterprise-level security

Stellar Cyber is simplifying cyberthreat detection and response with its open extended detection and response (XDR) platform for enterprise networks and managed security service providers (MSSPs).

XDR is an emerging product category solving three major pain points when it comes to security operations. First, it provides an open solution to replace a multitude of siloed security analytics tools from legacy providers. Next, it automates much of the cybersecurity process, which reduces the need for skilled IT professionals – in short supply in today’s labor market. Finally, it provides a more efficient way for organizations to manage and respond to a growing volume of security alerts.

We joined a $38 million Series B funding round for Stellar Cyber because the company has demonstrated its leadership in the XDR market, and its growth potential. This investment round was led by Highland Capital and also included existing investors Susquehanna International Group, Valley Capital Partners, and Northern Light Venture Capital.

Stellar Cyber’s Open XDR solution stands out with the most comprehensive in-house security modules at both frontend and backend, offering better integration and more effective incident correlation at lower cost. The product has natural synergy with endpoint security solutions like Samsung Knox, an enterprise-level mobile security solution.

We were particularly impressed by Stellar Cyber’s sales growth during the COVID-19 pandemic, which was driven by the need for small- and medium-sized businesses and MSSPs to provide better security for a surge in remote workers.

The Stellar Cyber team also has the know-how and experience to accelerate the company’s growth. Changming Liu, CEO and co-founder, previously founded Aerohive and Trustgo, and was an early employee and a key architect at Netscreen — acquired by Juniper in 2004 for $4 billion. Aimei Wei, CTO and co-founder, has worked for both early stage startups —Nuera, SS8 Networks, and Kineto Wireless — and well-established companies, including Nortel, Ciena, and Cisco.

The combination of accelerated migration to the cloud and the need to provide security for remote workers is increasing demand for more powerful and streamlined solutions. As the enterprise security industry matures, we think Stellar Cyber is going to be a leader in the $20 billion XDR market.