Island, the secure browser company, may be the most valuable startup you’ve never heard of. The company, which puts the browser at the heart of security, announced a $175 million Series D investment on Tuesday at a whopping $3 billion valuation. Iceland has now raised a total of $487 million.
That’s a lot of money, and it makes us wonder: What is the company doing to justify such an investment at this level of value? Doug Leone, a partner at Sequoia who invested in Iceland in the A round, says he was attracted by the founding team and the company’s unique value proposition.
“The two founders, one of whom was a technical founder from Israel – Dan Amiga – and one who was a very senior security executive from the US – Mike Fey – had a vision that you could build a Chromium-based browser for the consumer worker in an enterprise it looked like a standard browser, but was secure and would stop bad guys from doing a whole range of things,” Leone told TechCrunch.
He says the bottom line is that you can reduce the overall cost of security by replacing things like a VPN, data loss prevention, and mobile device management, all of which can be done directly in the browser, rather than using separate tools buy. This, in turn, could reduce the overall cost of securing a network.
“Iceland defines a category with an enterprise browser while allowing employees to work in a familiar environment and providing greater security,” said Ray Wang, founder and principal analyst at Constellation Research.
“They are using the security aspect to change the interactions between people and computers,” he said. “Think of the browser as your screen in a choose-your-own-adventure game, and based on all the data collected, it can deliver contextually relevant content, actions and insights, all while providing enterprise-class data security , process and identity.”
Fey acknowledges that if he showed up at a company with a proprietary browser and the company had 20,000 apps — which would be possible in a Fortune 100 company — he would have to test all of those apps with that browser. But the fact that Island is based on the Chromium standard means IT can trust the browser without having to put everything through a lengthy testing process. “The browser world is standardized on Chromium. This idea could not have been realized before,” Fey said.
Despite the value proposition and standardized approach, Fey says it still takes some explaining to get executives to understand that paying for a security-focused browser can actually save them money in the long run. “You have to explain where the ROI comes from. What do I get? Where does it come from? And the ROI has to be very understandable, very credible and large,” he said.
How large? Consider that he says one company saved $300 million annually by eliminating racks in a data center because it no longer required nearly the same resources to run the same applications.
According to Fey, the point is not to replace these tools, but rather that using a standardized browser makes doing things like web filtering or even virtual desktops much easier. It sounds simple, but the company has 280 employees, 100 of whom are engineers. He says a lot of technical work was needed to make this possible.
He doesn’t want to give specific sales figures, but the company has around 200 customers and has grown steadily in recent years. Leone described it as exponential growth.
Fey believes Iceland can eventually be a significant publicly traded company. “At this point, we are achieving reasonable ARR, meaningful ARR, and our margins are good,” he said. “So you know we expect to be a strong IPO candidate one day, but not next year. Someday.”