Summary:

Zscaler is done saying no to venture capitalists and has managed to raise $38 million in its first round of outside investment from Lightspeed Ventures. The company is offering a new form of security software designed to accommodate today’s mobile workforce and delivered as a service.

Jay Chaudhry, CEO of Zscaler.
photo: courtesy of Zscaler

Zscaler a four-year-old startup that has bootstrapped its business by providing a new form of security designed for a mobile and cloud-dependent workforce, has raised $38 million in first-time financing. The round was led by included Lightspeed Venture Partners and was led by an unnamed strategic investor.

Zscaler has been fairly successful in its four years building a significant base of clients including Crutchfield Corporation, La-Z-Boy and Telefonica. The company’s software as a service is hosted in more than 100 data centers around the world and essentially protects a company’s web traffic. It does this by routing requests through Zscaler’s software. But there’s no software for users to download on their clients and there’s also no appliance for corporate IT to worry about.

As the cloud and mobility do away with the perimeter model of security where a firewall may prevent harmful traffic from getting in and corporate secrets from getting out, Zscaler is one of several new companies trying to adapt security to a world where there is no perimeter. And even if the corporate IT thought it had a perimeter, the corporation may not own it or have a say in what runs on it. A perfect example of this might be the CEO’s iPad (a aapl).

Zscaler doesn’t solve all problems, but it’s certainly ahead of the pack in thinking about security in a forward-looking way. Other companies trying to address the changes in security required by BYOD and corporate access to the cloud applications are Bromium and CloudPassage. And by waiting to take on venture capital Zscaler’s CEO Jay Chaudhry has joined a select group of established companies who are finally succumbing to the lure of VC cash. For example Qualtrics, a ten-year-old company this year raised $70 million in its first round of outside investment. Another company, Code 42, avoided VC dollars for 11 years before this year raising $52.5 million.

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