Vanta raises $150M Series C, now valued at $2.45B

Vanta, a trust management platform that helps businesses automate much of their security and compliance processes, today announced that it has raised a $150 million Series C funding round led by Sequoia Capital.

The company is now valued at $2.45 billion, up from $1.6 billion in 2022 when it raised its $40 million Series B round. Earlier this year, Vanta announced that it had surpassed $100 million in ARR in its financial year ending in January.

Initially, Vanta focused on helping businesses obtain ISO 27001, HIPAA, SOC 2, and similar certifications. Now the company is aiming to go beyond that. Vanta co-founder and CEO Christina Cacioppo told me that while Vanta obviously started with a focus on automated compliance, especially for startups, it is now moving to become part of a larger and more holistic discussion about trust.

“Vanta today, we still do a lot of SOC 2, but a lot of what we’re building is around how do you help companies build out their security programs?” Cacioppo told me. “And then how do they go get credit? There’s a compliance piece, there’s the trust centers, there’s real-time security status pages and questionnaire automation, but the thesis behind a lot of that is: if you can give people credit — which really means revenue — for showing off all the good security work they’ve done, they will do more good security work. … When we talk about trust, a lot of trust in software, especially B2B software, it’s around: Can I trust you with my customers’ data?”

She noted that a customer like Omni Hotels, for example, doesn’t necessarily come to Vanta because they need help with compliance, as they don’t actually build their own software. But they do hold a lot of customer data in third-party tools and they need help in making sure that those tools are secure and trustworthy.

As a part of this focus on trust, Vanta is also building some of its own security tools. It’s doing this not to compete with the likes of CrowdStrike, Cacioppo said (and this was before last week’s CrowdStrike disaster), but to help companies ensure that when they make a claim about, say, which employees have access to a given dataset, they can demonstrate that this is indeed the case on a deeply technical level.

Often this also means building integrations into existing security tools. So far, Cacioppo said, Vanta has built roughly 200 of these in-house and another 100 companies or so have also built their own.

Naturally, the company also has an AI play. Vanta launched its first AI products last year and it now expects to increase its use of large language models.

For example, the company recently launched its questionnaire automation service. Many companies use security review questionnaires when they bring new vendors on board, for example. These take forever to fill out, in part because the information lives in so many different systems. The idea here then is to automate all of this — with humans in the loop — and so far, Vanta’s quality metrics show that about 80% of the answers the tool provides are immediately accepted by the human reviewers. A large number of the missing 20% requires only minor wording changes.

“It is an application of LLMs that is actually useful, actually saving people time, [doing work] that, in fact, no one wanted to do, at least from a blank page,” Cacioppo said.

With this new funding, Vanta plans to continue to go upmarket as it branches out from its startup roots (and even today, three-quarters of the current YC cohort uses Vanta). In total, the company now has over 8,000 customers. But the company also plans to use the new funding to build out its AI products (a common tenor among startups these days) and to increase its global presence. Vanta currently has 500 employees with a regional focus on North America, the U.K., Germany and Australia, and about a quarter of Vanta’s customers are now outside of the U.S.

New investors in the round include Growth Equity at Goldman Sachs Alternatives and J.P. Morgan. Existing investors Atlassian Ventures, Craft Ventures, CrowdStrike Ventures, HubSpot Ventures, Workday Ventures and Y Combinator also participated in this round, which brings the company’s total funding to $354 million since its launch in 2018.