Zscaler: Innovation and audacity win the race

Ravi Mhatre,
Founder, MD, Lightspeed Venture Partners

At Lightspeed, we believe in investing in people as much as in companies. So as we got to know Zscaler’s Jay Chaudry over the years, we knew he was an excellent long term bet, and had the substance to build a company that could redefine its market.

Chaudry’s is a canonical success story — an immigrant who came to the US with little but drive and determination and worked tirelessly to become a successful serial entrepreneur. By the time I met him he’d already started five companies and enjoyed major exits with CipherTrust and AirDefense, which were acquired by Secure Computing and Motorola, respectively.

He followed those up with a then-radical vision for how to do security in the cloud, co-founding Zscaler in 2008.

Back then, Amazon Web Services was not quite two years old. Microsoft Azure wouldn’t exist for another two. Salesforce’s revenues were a fraction of what they are today. Outside the tech bubble, the ‘cloud’ wasn’t on anyone’s radar.

In that era, enterprise security was based on the classic castle-and-moat model: Lock up all your applications and data inside your data center, put a ring of security appliances surrounding the perimeter, then pull up the drawbridge and drop the portcullis. As solutions go, it was costly, complex, and didn’t scale very well, but it was the best enterprises could manage at the time.

Zscaler was predicated on the heretical notion that not only was the cloud secure enough for enterprise users and applications — it was the best way to provide security for data and applications.

As mobile began swallowing the world, the traditional network perimeter disintegrated, and the cloud became the preferred delivery vector for services and data, Chaudry’s vision proved prescient.

But it wasn’t enough to predict the future — Zscaler also needed to make it possible. The ability to process every web packet that every employee in an enterprise would send or receive, and do it hundreds of thousands of times a second without adding latency, was a daunting engineering problem at scale. And Zscaler figured out how to solve it. I’m not sure anyone else has.

Today Zscaler operates 100 cloud data centers and is on every continent except Antarctica. It handles more than 40 billion requests and blocks more than 100 million threats each day. Its customers include over 200 of the Forbes Global 2000, including brands like Siemens, Schneider Electric, and AutoNation. It’s no accident that Zscaler has been named a leader in Gartner’s Magic Quadrant for Secure Web Gateways for seven consecutive years.

The next ten years look equally promising. As we all know, the number and severity of threats is growing exponentially. Protection needs to sit between the user and destination, regardless what device is being used whether access is via broadband, 5G or a traditional corporate network. The only way to do it is to deliver security as a service from the cloud.

We were thrilled to be part of the first outside investment in Zscaler in 2012, and to follow that up with a second investment in 2015. And we take great pride in their recently launched IPO.

Zscaler is a classic example of what I like to call a Lightspeed-caliber company. They were able to see the future well ahead of anyone else, and build a platform to turn their vision into reality. Lightspeed has been more than happy to accompany them on their founder’s journey.