Snyk earns another $196M as valuation drops 12% to $7.4B • TechCrunch

Snyk hasn’t been afraid to take on the cash over the years, making a bigger and bigger investment with each round, and each has resulted in a significant valuation increase as a result. This time, that particular streak ended, but Snyk landed another $196.5 million investment with a valuation down about 12% to $7.4 billion since his previous round in September 2021.

This previous round was $585 million with $300 million in primary funding and the remaining $230 million in secondary funding to repay early investors and employees, keen to see a return on their equity. Main money came on an $8.5 billion valuation, $1.1 billion higher than today’s round.

It should be noted, however, that even with this round down, the previous round was up $3.8 billion from the March round. You can see the company’s ascent up to this round in the chart below:

Snyk CEO Peter McKay said getting the terms right was more critical than increasing the valuation, especially in today’s market. “So it was more important that we get the terms right and then I absolutely have to get to $8.6 billion. If the market says you’re at 7.4, then we’re at 7.4, a- he declared.

Part of this is because while the company is growing, the market has changed since the last cycle. “Despite the headwinds that I think everyone is seeing in the market, we’ve been able to continue to grow over 100% in terms of new logos and revenue, so we’re very pleased,” he said. .

The company still has most of the money from last year’s round in the bank, but it saw an opportunity to get more cash, which could help it as it tries to grow the platform, both organically and through acquisitions.

“What you do with a market like this is you focus on making your business more efficient, you focus on getting free cash flow faster. You make sure your balance sheet is as solid as possible. And be opportunistic,” he said.

He sees that Snyk’s market around developer security remains fragmented, and he sees an opportunity to shore up the market by buying companies when it makes sense and taking advantage of what he sees as a very large TAM. McKay says the company’s size has tripled since its last funding round, from 400 employees to 1,200, but he sees ways for the company to be more efficient for investors in other ways, aiming to reach cash flow balance by 2024 as a prime example.

Most security startups go platform or get absorbed into a platform, and Snyk apparently wants to be a platform player at this point. This money should help the company until the stock market is up for a friendlier IPO environment.

“We really haven’t set a time. We think there will be a surge in the first half of 2023. We’ll watch and see how they do and based on that maybe we’ll make a decision on what we do… I don’t even want to speculate at an hour because who knows when? Nobody has that answer,” he said.

Today’s investment was funded by new investors Evolution Equity Partners, G Squared, Irving Investors and Qatar Investment Authority. Existing investors Boldstart Ventures, Sands Capital and Tiger Global also participated. The company has now raised $1.075 billion.