Buoyed by Law Firm Cybersecurity Demand, eSentire Announces Sizable Investment

Canada-based cybersecurity company eSentire announced it received a sizable investment from private equity firm Warburg Pincus, underscoring the growing demand for managed detection and response services from a host of industries, including legal.

ESentire didn't disclose the investment amount, though said it was in the nine figures, and many times its total previous funding. eSentire received $14 million in Series C funding in 2014 and $19.5 million in Series D funding in 2016 .

J. Paul Haynes, eSentire's CEO, said the investment will be put toward "additional research and development" of its cybersecurity technology, expanding the company's presence in the U.S. and around the world, and ensuring it protects and grows its market share in the managed detected and response market.

Though eSentire serves around 550 companies from a variety of industries, its success and growth has been buoyed by its popularity among law firms. "Our probably fastest-growing sector right now is the legal sector, where we have many of the sort of 'blue chip' law firms already as customers," Haynes said.

He added that eSentire recently brought in "one East Coast firm with 3,500 staff" as a client, though declined to name the firm.

That eSentire's success is partly owed to legal is no coincidence. Law firms have been grappling with ever-growing cyberthreats and incidents, such as the Panama Papers cybertheft and the recent ransomware attack on DLA Piper .

Haynes specifically cited ransomware as becoming "as big a problem in legal as it is in finance and health care," adding that law firms were also under increasing pressure from their clients to attest to their cybersecurity protections.

What managed detection and response companies like eSentire offer laws firms is an outsourced security operation center (SOC), which continuously monitors the firm's network traffic, systems and IT infrastructure to uncover and neutralize cyberattacks.

Haynes called eSentire's SOC the "last line of defense" for many companies after their firewalls and other security protocols have been breached.

He added that eSentire is constantly looking for "very weak signals anomalies" in the network traffic of its clients to detect any cyber intrusions.

Where eSentire believes it stands out from other managed detected and response companies is in the technology and methods it employs to monitor its clients' networks and data. Haynes noted that the company can remotely collect and monitor all pertinent data that is hosted within the client's offices and servers.

Increased investor interest in eSentire comes as the market for SOC services takes off. A recent report by ALM Intelligence found that the market for SOC services is expected to grow to $4.83 billion by 2018 from a 2014 market cap of $3.96 billion

Erin Hichman, ALM Intelligence senior analyst for IT consulting research, told Legaltech News that modern SOC services are finding success because they go beyond just detection and monitoring. "[They take] things a step further by predicting threats, giving companies a leg-up in prevention," she said.