Island, the enterprise browser company, may be the most valuable startup that you have never heard of. The company, which is putting the browser at the center of security, announced a $175 million Series D investment on Tuesday at a whopping $3 billion valuation. Island has now raised a total of $487 million.
That’s a ton of money, and it makes us wonder: What is the company doing to warrant this kind of investment at this level of value? Doug Leone, a partner at Sequoia who invested in Island going back to the A round, says that he was attracted to the company’s founding team and unique value proposition.
“The two founders, one of whom was a technical founder out of Israel — Dan Amiga — and one who was a very senior security executive out of the U.S. — Mike Fey — had a vision that if you could produce a browser based on Chromium that looks like a standard browser to the consumer employee in a corporation, but was secure, it would stop bad guys from doing a whole bunch of things,” Leone told TechCrunch.
He says that the end result is that you can lower the overall cost of security by replacing things like a VPN, data loss prevention and mobile device management, all of which can be done right in the browser instead of purchasing separate tools. That could in turn lower the overall cost of securing a network.
Island is defining a category with an enterprise browser, while allowing employees to work in a familiar environment and keeping them more secure, says Ray Wang, founder and principal analyst at Constellation Research.
“They are using the security angle to change human computing interactions,” he said. “Think of the browser as your screen into a ‘Choose Your Own Adventure’ game, and based on all the data being captured, it can deliver contextually relevant content, actions and insight, but it does it while delivering on enterprise class security of the data, process and identity.”
Fey acknowledges that if he showed up at a company with a proprietary browser, and they have 20,000 apps — which would be possible in a Fortune 100 company — then they would have to test all those apps against that browser. But the fact that Island is based on the Chromium standard means that IT can trust the browser without having to put everything through a lengthy testing process. “The browser world standardized on Chromium. This idea couldn’t have come to fruition before that,” Fey said.
In spite of the value proposition and the standardized approach, Fey says it still takes some explaining to get executives to understand that by paying for a security-focused browser, they can actually save money in the long run. “You have to explain where the ROI [return on investment] comes from. What am I getting? Where’s it coming from? And the ROI has to be very understandable and very believable and large,” he said.
How large? Consider that he says one company saved $300 million a year shutting down racks in a data center because they didn’t require nearly the same level of resources anymore to run the same applications.
Fey says it’s not about replacing these tools, so much as the fact that taking advantage of a standardized browser just makes it so much easier to execute on things like web filtering or even virtual desktops. It sounds simple, but the company has 280 employees, of which 100 are engineers. He says a lot of engineering work went into making this happen.
While he wouldn’t discuss specific revenue numbers, the company has around 200 customers and has been growing steadily over the past couple of years. Leone referred to it as exponential growth.
Fey thinks that Island can be a substantial public company eventually. “We’re getting into decent ARR at this point, meaningful ARR, and our margins are good,” he said. “So you know what we think is we will make a strong IPO candidate someday, but not next year. Someday.”