SA国际传媒

Another day, another big round to a Minnesota-based cybersecurity firm.

A day after Minneapolis-based raised a $410 million growth investment from private equity giant , Eden Prairie, Minnesota-based raised $401 million in convertible notes led by existing investor .

Convertible notes are something that could become more en vogue as the venture capital pullback continues (something we mentioned months ago). They work like a short-term loan, but convertible notes are repaid to the investor at a later point in equity鈥攊.e. after an IPO鈥攖ypically at a discount and can also include an interest rate.

Convertible notes also can benefit the company in the sense of providing upfront cash without having any initial dilution.

A different time

In July 2021, the managed cybersecurity company raised $150 million at Series F led by and Owl Rock, taking the company鈥檚 valuation from $1.3 billion to $4.3 billion.

At that time, then-CEO an IPO was likely the next logical move.

However, this is a much different time than July 2021 when it comes to venture capital and the public market. Funding to VC-backed cybersecurity startups is not nearly on the pace it was last year when it hit an all-time high of nearly聽 $23 billion. Through the first half of this year, startups had raised $10.3 billion, according to SA国际传媒 data.

In August, was appointed CEO as NeSmith became executive chairman of the board.

Others participating in the convertible notes offering from Arctic Wolf include Viking Global Investors, the and funds advised by .

Founded in 2012, Arctic Wolf has raised nearly $900 million, according to SA国际传媒 data.

Further reading:

• KKR Invests $410M In Cyber Firm NetSPI
• Funding To Cybersecurity Startups Dips Amid Market Turmoil

Illustration: Dom Guzman