Announcing Ten Eleven’s Latest Fund, TE3
Today, we’re thrilled to announce that we have raised $600 million for our Ten Eleven Ventures third generation fund (“TE3”). This also marks a notable milestone for our firm: taken together with our prior funds, we cross over $1 billion under management. We have made over 40 investments to date and will use TE3 to make additional investments as we always have – cyber-specialized, globally, and at all stages.
Cybersecurity only.
Back in 2014, security was often underappreciated in the investment ecosystem. Like many of the entrepreneurs we have backed, we were disrupting the traditional VC business when we started. Many asked us: what is so unique about cybersecurity that it needs a dedicated fund? Is it a big enough space? But we believed then, as we do now, that emerging security companies deserved a specialized venture capital firm with deep category expertise that could identify and nurture companies with unique insight, mentorship, expertise, and connections necessary to navigate this specific sector. In hindsight, their questions seem quaint, with between 5-15 funds focused almost entirely on cyber, the security software market growing 22.5% in 2021 (Gartner) and ~$20 billion invested in the sector in 2021 (Crunchbase). Over the past 8 years, Ten Eleven has backed some of the most essential security innovators, including Cylance, Darktrace, KnowBe4, Ping Identity, Twistlock, Verodin, and others. Cybercrime is at an all-time high and security is the top spending priority for CIOs. Time has proven that the cybersecurity sector is technical enough, large enough, and vital enough that a specialized fund is justified and highly desirable to LPs and entrepreneurs. We look ahead with immense pride that we built the specialist firm that was needed at the time and ignited the industry around us.
Globally opportunistic.
When we founded 1011vc, Mark Hatfield and I were also often asked: “who is moving where?” because conventional thinking was that any new firm needed to “office” together physically. We said we would go out and meet entrepreneurs where they were in the world, not rely on their pilgrimages to the Valley or Boston to see us. Additionally, a core part of our strategy was the geographic opportunity we knew we could capture, an almost “rise of the rest” concept within cybersecurity. We had seen remote teams be successful before and knew there were great cyber founders in cyber hubs around the US and the world who could build compelling companies with global themes. When the pandemic accelerated the globally connected, work from anywhere movement, we were more than ready for it.
Stage agnostic.
Before starting Ten Eleven, Mark and I were involved in both early-stage and growth-stage deals. Exposure to later-stage deals included my advisory work with KKR. It was immediately apparent how beneficial it was to be cyber-focused but stage agnostic, gaining insight via the dynamics playing out between early-stage disruptors and mature stage stalwarts, who held a significant advantage in distribution but had to work harder and harder to maintain an innovation edge. When we started Ten Eleven, we felt it was essential to maintain our relationship with KKR. However, it was not obvious how best to structure a long-term partnership that would make us both stronger in the industry. We are incredibly proud that the 1011vc/KKR Joint Investment Alliance forged in 2014, as envisioned, has stood the test of time. We count KKR as an LP in this latest fund and our co-investing partner on over ten deals and counting. We continue to invest from seed to growth stage, and use our holistic perspective to inform our investment theses.
Cyber specialized, global, stage agnostic = 1011vc.
I am proud that we will forever be the first VC fund 100% dedicated to cyber and remain unique as the sole cyber, global, and stage-agnostic firm. Now we embark on our next growth phase, during which we will see how impactful we can become in the broader world. Today, the world regularly considers the role of cyber in wars, energy, privacy, digital transformation, governmental trust, and advertising – indeed, cybersecurity has become a transcendent societal issue in widely visible ways. Our ongoing mission at 1011vc empowers and amplifies the collective missions of founders, who are doing genuinely impactful things for the world by reinforcing an ethos of trust that is critical to capitalism and democracy. As I reflect ten years onwards from when we first began to think about our firm, it is clear that the unique characteristic of cyber VC investing, versus even other mission-driven sectors, is the sense of deeply embedded collective purpose that unites the industry.
Grateful for our team.
The successes we’ve had and lessons we’ve learned are ever-growing. We’ve built our firm with intention, holding close to the belief that entrepreneurs should be able to look back and measure the worth of a VC firm in more than just dollars. Over the lifecycle of our last two funds, we’ve been able to add specialized talent, offering portfolio companies support in the specific functional areas where they need guidance with a unique cyber lens. These team members forge deep relationships with the team members at our portfolio companies to be there for whatever needs arise.
Our expanded bench includes long-time collaborator and friend Brian Draves, whom I first worked with at PGP Corp., where I was a co-founder. Brian now helps our firm and portfolio companies on various operational and legal issues. We’ve also added Todd Weber, the former CTO of Optiv, to the family to help evaluate new technologies and help our portfolio companies take their technologies to market. Three years ago, Kaiti Delaney joined to support our companies in financial matters, while Operating Partner and CMO Megan Dubofsky joined to support our portfolio companies in their go-to-market efforts.
We are also thankful for the Advisory Board we start this next chapter with, including some members who have been on our Advisory Board since inception and some new friends we have met over the past few years investing. Our Advisory Board includes industry practitioners, successful entrepreneurs, operators, and other global thought leaders. All of these tremendous individuals bring unique insight and passion into the world of cybersecurity, making us better investors and business builders. We are eternally grateful for their support.
Grateful for our founders.
But while we work every day to help every 1011vc portfolio companies get better – the truth is, the entrepreneurs at those companies make us better too. We also now have an impressive network of Ten Eleven entrepreneurs and “alumni entrepreneurs.” Their collective insight, creativity, and determination continue to inspire us. Building a company to solve the immense challenges that the digital world presents is an arduous task, requiring a level of persistence, discipline, and self-belief that is uncommon and special. We are constantly humbled and grateful for their time, energy, and commitment to supporting the next generation of entrepreneurs who will help secure our digital lives. As our knowledge compounds from our shared experiences, we will prioritize passing on this learning to every new entrepreneur we invest in.
“Higher and higher”
The current economic and geopolitical environment now is exceptionally dynamic, filled with new challenges and new opportunities. In this complex world, ever more dependent on emerging technologies and bruised by the shocks of the past few years, security remains top of mind. Ten Eleven continues to relentlessly root for the next generation of security innovators across the globe, supporting them in whatever ways we can to remove roadblocks and accelerate their trajectory. Our focus and alignment have led to remarkable things and will continue to propel us. The next chapter will be fast-paced, fascinating, and rewarding – we look forward to every moment.
