Zorus Raises $9M; Plans Detection and Response Security Solutions for MSPs
Zorus has raised $9 million in Series A funding, formed a new board featuring Datto and Akamai veterans, and announced plans to extend its security platform from filtering to “extensive detection and response security solutions,” the MSP-focused security company disclosed today.
Among the key factoids to note:
- Asymmetric Capital Partners led the funding round, with additional capital coming from Innospark Ventures and existing seed investor General Catalyst.
- The new Zorus board includes Austin McChord, CEO of Casana and founder of Datto; and Paul Sagan, a senior advisor at General Catalyst, and formerly CEO of Akamai and non-executive chair of Datto.
Datto veteran Ian McChord has led Zorus as CEO since October 2020. Zorus founder Greg Gage, another Datto veteran, is CTO. The current Zorus SaaS-based platform includes A.I.-focused web filtering and productivity monitoring software sold through MSPs. Looking ahead, Zorus plans to add detection and response security solutions to the platform, though a timeline for the capabilities was not disclosed.
In a prepared statement about the business direction, Zorus CEO Ian McChord said:
“Today’s I.T. infrastructure requires an endpoint-first approach. Security starting at the user provides a better level of protection than previous router- or network-based solutions. What we can do to protect users and their businesses on top of the Zorus filtering agent is almost limitless.”
Detection and Response for MSPs: Emerging Security Options
The Zorus funding surfaces during an EDR (Endpoint Detection and Response), MDR (managed detection and response) and XDR (eXtended Detection and Response) land grab in the MSSP and MSP markets. Among the factoids to note:
- MDR market: Dozens of MDR security companies are in the market, though only a handful — such as Blackpoint Cyber, Huntress, Netsurion and Stellar Cyber — truly target MSPs in the SMB sector. Moves to watch include Blackpoint’s partnership with Webroot and OpenText. Also, former Microsoft Channel Chief Gavriella Schuster joined Open Systems’ board earlier this week amid an MDR business push.
- EDR Market: SentinelOne and CrowdStrike are locked in an enterprise EDR battle, though SentinelOne is working with N-able, ConnectWise and other firms to reach MSPs in the SMB sector.
MDR and EDR Security Market Research and Growth Forecasts
The market for managed detection and response (MDR) security will reach $2.2 billion by 2027, which represents a 16.7% CAGR (compound annual growth rate) from 2021, according to Infinity Business Insights. ChannelE2E believes that’s a conservative forecast.
Meanwhile, the market for endpoint detection and response (EDR) security will reach $8.2 billion by 2028, which represents a 20.8 CAGR from $1.8 billion in 2020, according to Reports and Data.
Disclosure: Author Joe Panettieri is a member of Channel Angels, an angel investor peer group that invested in a Zorus seed round in 2020.
It’s awesome to see the increased flow of venture capital in innovative technologies focused on the IT channel. The more investment made, the more innovation that MSPs can leverage to best service and secure their clients.
Hey Colin: Always great to hear from you. I’ll state the obvious: Feels like deal flow involving MSP-oriented software funding remains very strong. Still, I often don’t know the valuations and multiples behind funding deals. The sector still feels hot. Though I do think in some cases SaaS valuations are overheated. But then again, I’ve been saying that (incorrectly) for about four years…
Funding opportunities remain strong, indeed. Perhaps there’s a panel to be had with some recently funded channel-focused tech startups to discuss the flow of money, how they are valued, and the stories they are creating that lead to high-conviction investments.
In early 2022 🙂