Soaring Cybersecurity Valuation: eSentire Weighs Sale at Nearly 7x Annual Revenue — Sources
FULL DISCLOSURE: This is sponsored content for Plurilock.
eSentire, a leading cybersecurity company based in Waterloo, Ontario, is reportedly exploring a potential sale that could value the firm at approximately $1 billion, including debt. This valuation is over seven times the company’s annual recurring revenue, which stands at around $150 million.
The potential sale is being orchestrated by eSentire’s owners, which include investment firms Warburg Pincus, Caisse de dépôt et placement du Québec (CDPQ), and Georgian. According to sources familiar with the matter, who spoke on the condition of anonymity due to the confidential nature of the discussions, the sale could attract significant interest from other private equity firms, although no deal is guaranteed at this stage.
Founded in 2001, eSentire has grown into a key player in the cybersecurity space, providing AI-powered tools that help companies preemptively identify and neutralize security threats. The firm serves over 2,000 organizations across more than 80 countries, spanning various industries including finance, healthcare, and legal services. The company’s AI-driven approach to cybersecurity has positioned it as a leader in the managed detection and response (MDR) sector, which has seen increased attention due to the growing sophistication of cyber threats.
Warburg Pincus, a global private equity firm, first invested in eSentire in 2017, recognizing the company’s potential in a rapidly evolving industry. In 2022, Canadian pension fund CDPQ and venture capital firm Georgian acquired a significant stake in eSentire from Warburg Pincus, signaling confidence in the company’s long-term growth prospects.
The proposed $1 billion valuation stands in stark contrast to eSentire’s recurring revenue of about $150 million, suggesting a valuation more than seven times its annual earnings. This disparity is a reflection of the cybersecurity industry’s burgeoning market, where companies with strong AI capabilities and a robust customer base are highly sought after.
The untapped potential of cybersecurity firms
eSentire’s valuation mirrors the broader trends within the tech and cybersecurity sectors, where companies are often valued based on their potential for growth, innovation, and market share rather than just their current financial performance. The ongoing digital transformation across industries and the rising number of cyber threats have significantly boosted the demand for advanced cybersecurity solutions, making companies like eSentire attractive targets for investors.
Also riding on this boom, Plurilock Security Inc. (TSXV: PLUR), a key player in the cybersecurity industry, continues to lead with its advanced security solutions, helping organizations maintain secure and efficient operations. In 2023, the company achieved $70.4 million in revenue, marking a 9% increase from the previous year.
| eSentire | Plurilock | |
| Annual revenue | $150 million | $70.4 million |
| Current valuation | $1 billion | $55.6 million |
| Current valuation multiple based on revenue | 6.67x | 0.79x |
Founded in 2016, Plurilock has revolutionized cybersecurity through groundbreaking academic research that introduced a novel technique for authenticating a person’s identity using behavioral biometrics. This technology continuously confirms identity by observing the motion involved in mouse and keyboard activity, offering significant advantages over traditional biometric technologies.
Today, Plurilock serves as a major North American IT Value-Added Reseller, critical services provider, and cybersecurity solutions vendor. The company supports federal, state, and local governments, as well as top global companies, with its unique expertise and solutions.
Plurilock provides a range of advanced cybersecurity solutions. The Plurilock AI Cloud platform secures users and cloud software without the need for new software deployment, offering flexible single sign-on, granular access controls, and native multi-factor authentication. Plurilock AI DLP ensures comprehensive data loss prevention and cloud security posture management, maintaining control over data access, sharing, and protection against unauthorized activities. Plurilock AI PromptGuard enables safer AI use by acting as a firewall between users and AI platforms, protecting sensitive data during interactions with AI tools. Plurilock AI Complete combines single sign-on, cloud access security broker, and data loss prevention capabilities with real-time identity verification using patented DEFEND technology.
The company announced earlier this year the expansion of its professional services engagement with a leading publicly traded semiconductor company listed on both the S&P 500 and Nasdaq 100 indexes.
Plurilock secured a gold medal in Info-Tech’s 2024 Data Quadrant for Cloud Access Security Broker (CASB) solutions for its Plurilock AI, marking the fifth consecutive year that the product has been recognized as a top performer in the highly competitive cybersecurity market.
Most recently, the company filed a nonprovisional patent application with the U.S. Patent and Trademark Office for its AI-driven cloud access security broker technology, which aims to prevent data leaks in generative AI platforms. This move follows the company’s recent patent filings and reflects its commitment to expanding its proprietary AI and cybersecurity technologies, addressing the growing need for secure AI use among major corporations.
FULL DISCLOSURE: Plurilock Security is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Plurilock Security. The author has been compensated to cover Plurilock Security on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.
