Endor Labs Secures $93 Million in Series B Funding Amid Rapid Growth and Innovation
In a significant development within the tech industry, Endor Labs, a burgeoning company specializing in application security, recently secured a substantial $93 million in Series B funding. This investment marks a pivotal moment for the firm, which has already experienced remarkable growth, boasting a staggering 30x increase in annual recurring revenue (ARR). The infusion of capital is expected to facilitate the company’s expansion from traditional application security into the realms of AI governance and code security.
Founded in 2021 and led by co-founder and CEO Varun Badhwar, Endor Labs has positioned itself as a prominent player in the cybersecurity landscape. Prior to launching Endor, Badhwar achieved significant success in the cloud security market, scaling Palo Alto Networks’ Prisma Cloud business to an impressive $300 million in ARR within a mere three years. His rich history in the industry, including the founding of RedLock — which was acquired by Palo Alto Networks in 2018 — has equipped him with the acumen and experience to steer Endor Labs into a promising future.
The recent funding round was spearheaded by DFJ Growth, which has a reputation for backing successful ventures, including OpenAI and xAI. Badhwar expressed gratitude for their support, particularly noting their longstanding relationships with industry veterans like Ramin Sayar, who led Sumo Logic through its IPO and subsequent acquisition. This partnership is anticipated to bolster Endor Labs’ efforts to scale operations aggressively, especially against the backdrop of current macroeconomic uncertainties.
Endor Labs plans to allocate the Series B proceeds towards overseeing and safeguarding code generated by AI assistants. To effectively do this, they aim to leverage their robust foundational infrastructure, which has been meticulously developed over years of securing open-source code. Badhwar emphasized that the integration of AI security checks directly into developer tools — such as Cursor — addresses the unique risks posed by AI-generated code.
With the rise of large language models (LLMs) in coding, organizations face escalating security risks, as these models are often trained on open-source software that carries inherent vulnerabilities. Badhwar noted that approximately 80 to 90 percent of code within modern enterprises comprises open-source contributions, necessitating a meticulous approach to security. Endor Labs has built proprietary databases over the years that encapsulate flaws found in open-source software, allowing them to serve as an intelligent intermediary between AI-generated code and its production deployment.
The company’s strategic move to shift from mere vulnerability detection to a more comprehensive focus on AI governance is driven by its unique open-source vulnerability graph, as well as its internal analysis of customer code. This foundation provides a platform that abstracts access to core datasets and functionalities, facilitating the rapid deployment of new security agents capable of addressing various needs ranging from vulnerability scanning to code review.
In distinguishing itself from competitors like Snyk and Checkmarx, Endor Labs incorporates a deeper integration within the developer workflow, making it not only comprehensive but also future-focused as the landscape of software development evolves. Badhwar believes that addressing vulnerabilities in both human-generated and AI-generated code is crucial and currently underloved in the enterprise software sector. “We are not just trying to solve one small sliver of problems,” he remarked, emphasizing the company’s ambition to be the go-to platform for secure software development.
Clientele for Endor Labs spans various sectors, including software development, financial services, and insurance, with customers ranging from medium-sized firms to international corporations employing over 200,000 individuals. Initially embraced by application security teams, the platform is now attracting interest from platform engineering teams and chief technology officer (CTO) organizations, demonstrating its capability to enhance developer productivity by automating vulnerability management.
Badhwar has highlighted a 166% net recurring revenue (NRR), indicative of the company’s effectiveness in retaining and expanding existing contracts. He diligently monitors a range of performance metrics, from top-of-funnel performance to customer acquisition costs, to ensure that Endor Labs is on a trajectory suitable for an initial public offering (IPO) in the near future. He has expressed a clear vision: to establish a sustainable and financially efficient business capable of thriving in the competitive landscape of cybersecurity.
In summary, Endor Labs not only exemplifies the rapid growth potential within the tech industry but also underscores the increasing relevance of AI in application security. With a unique approach, robust funding, and a visionary leadership team, the company is poised to make significant strides in addressing the challenges posed by AI-generated code in software development, ultimately shaping the future of secure coding practices in the enterprise environment.