Cylake raises $245M in convertible notes for cybersecurity 'operational sovereignty'
Lightspeed, Picture Capital and Redpoint back the Sunnyvale company in one of the largest security financings of the month - structured as notes rather than a priced round.
Cylake, a Sunnyvale cybersecurity company, has raised $245 million from Lightspeed Venture Partners, Picture Capital and Redpoint Ventures. The company describes its platform as addressing operational sovereignty - keeping security operations under an organisation's own control rather than dependent on external providers.
The structure is the story
The round was raised as convertible notes rather than as a priced equity round.
At $245 million that is unusual. Convertible notes are conventionally a small, early instrument used to defer the work of setting a valuation. Using them at this size is a deliberate choice to postpone that conversation - typically because either the company or its investors expect the valuation to be materially different by the time it is settled.
It is not possible to say from the outside which way that expectation runs, and the participants have not said. But it is the most interesting detail in the deal, and it is worth noting that the same investors led it rather than a new outside lead setting a price.
Context
Security spending has held up better than most enterprise software categories through the current cycle, and sovereignty - over data, over operations, over the supply chain - has become a live procurement requirement rather than a talking point, particularly in Europe and among regulated industries.
Cylake is positioning directly into that demand.
Sources
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