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Tanium, the $1 billion company you’ve never heard of

You may have heard of the exclusive and elusive $1 billion valuation club, which Forbes tracks in order to showcase the highest valued businesses in the world. It’s a list that’s tough to get on and even tougher to stay on—in fact, every year a number of businesses fall off the list. There have been quite a few “startups” in recent years getting added to the list, such as “unicorn” poster children for startup success like Airbnb and Uber.

Everyone’s heard of Airbnb and many of its unicorn brethren, but few have heard of security startup Tanium. This is a father-son company that began 18 years ago, and breached the billion-dollar mark in just the last several months.

Even though Tanium has been around for years, a lot of people are seeing it as an overnight success largely because it never really found the spotlight until recently. In March 2015, Tanium announced that notable investor Andreessen Horowitz boosted the company with $52 million, which complements its $90 million investment in 2014. That’s one of the venture capitalist’s biggest overall investments ever.

What does Horowitz see in Tanium that others missed for nearly two decades?

What’s it Worth to You?

Based in California, the current valuation of Tanium is $1.75 billion, as revealed by sources who know the ins and outs of the deal. Last year, the company was valued at about $900 million, so it was already closing in on the billion-dollar benchmark. Tanium discovers and deals with security threats on networks used by large companies. This includes servers, cash registers, laptops and more. The architecture is peer-to-peer based, so administrators can pinpoint issues immediately—as opposed to the sometimes days-long wait necessary without the product.

The “alternative” to this type of product is contacting every computer (or other computing endpoint) individually to find the problem, which is clearly a time and money waster. Major companies have been depending on Tanium for years, and the father-son team say that half of the 100 biggest US companies use the product including 40 percent of the top ten retailers.

Showing Everyone the Money

In order to subscribe to Tanium’s product, customers need to provide a down payment and partial subscription fee. Every year, money made from these fees has quadrupled and finally reached $74 million last year. Even with that fee growth, Tanium reports few companies opt out when faced with the higher prices. Interestingly, Tanium was profitable from its first month 18th years ago and has always been debt free. Average cash on hand hovers at around $100 million today.

The company has attracted large customers like Best Buy, Target, Due, and Zurich. It brought in HP after the CMO joined.

This road to success wasn’t easy. The founders spent eight years perfecting the software and over a decade managing the IT space. David and Orion Hindawi also founded BigFix in 1997, another tech startup they sold to IBM years ago for $400 million. That’s what served as the financial foundation for the company.

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