Waltham cybersecurity firm gears up for expansion, possible IPO in 2016

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Waltham cybersecurity firm Digital Guardian has landed $66 million in a new round of venture funding, money that will help the company add dozens of jobs next year and potentially prepare for an initial public offering.

Digital Guardian chief executive Ken Levine said he plans to expand his staff by 60 to 70 people next year, in part with the new VC financing. Levine, who also is an investor in the firm, said the data protection company employs about 265 people today. Roughly half are working in Waltham, and there are about 80 employed as sales agents around the globe.

The growth next year will include more jobs in the firm’s new offices in Sunnyvale, Calif., and Salt Lake City. The Sunnyvale office is home to Code Green Networks, a provider of data loss prevention software that Digital Guardian acquired earlier this year.

The new investors in this round included LLR Partners, MassMutual’s venture capital arm, and Siemens Financial Services’ VC arm. Previous investors also contributed; they include GE Pension Trust, Fairhaven Capital Partners, Loring Wolcott & Coolidge, Special Situations Funds, and Brookline Venture Partners.

Levine declined to disclose the value that the latest funding round places on the company, which started in 2003 and was previously known as Verdasys.

“I think there are [some] crazy valuations out there in our space,” Levine said. “We were not one of them. We have a very real business and to some extent, I think we were measured more as a mature company.”

Levine said the company is broadening its customer base, by offering cloud-based data security services for smaller companies, beyond its earlier focus on selling software to larger organizations. The company’s revenue for 2015 will be in the $50 million range, up more than 50 percent from last year, he said. Levine said he expects that to grow to the $70 million range next year, and for the firm to be profitable by early 2017.

“Sizewise, we should be in that sweet spot, at least if current market conditions hold, for cyber companies going public in 2016,” Levine said. “I don’t think it’s unreasonable to think we could be having those conversations next year.”