- Duo Security Inc. grew its customer base from 8,000 to more than 10,000 in 2017
- It made history when it announced in October that it had raised a venture capital round of $70 million
- Largest ever venture capital round in Michigan
For Ann Arbor-based Duo Security Inc., 2017 was a big year.
The cybersecurity company grew its customer base from 8,000 to more than 10,000 in 100 countries around the world, including Microsoft, Facebook, Paramount Pictures Corp., the University of Michigan, Random House, Etsy, Yelp, Zillow Group Inc. and the University of California, Los Angeles.
And Duo made history when it announced in October that it had raised a venture capital round of $70 million, the largest ever in Michigan.
“It was a transformational year for us,” said company CEO Dug Song, who co-founded the company in 2010 with Jon Oberheide, the company’s chief technology officer.
In June, Song was honored as a Michigan Change Maker by Crain's.
In November, Song and Oberheide were named Entrepreneurs of the Year at the Michigan Venture Capital Association’s annual awards dinner at Little Caesars Arena in Detroit.
Duo’s newsmaking venture capital round surpassed a $62 million raised by Ann Arbor-based Millendo Therapeutics Inc. in 2016 and brought the total capital raised by Duo to $119 million. It also gave the company a valuation of $1.17 billion, which put it ahead of Ann Arbor-based Esperion Therapeutics Inc.’s $1 billion for the highest valuation for a venture-capital backed company in Michigan, according to the MVCA.
Cracking the $1 billion in valuation puts Duo in the ballyhooed tech category known as a Unicorn.
“We exceeded all our goals,” said Song of the past year. “We’ve built an enduring company with hundreds of millions in revenue that will be here for decades.”
In an interview with Crain’s in December, Song didn’t have precise revenue figures for the year. Still, revenue in the “hundreds of millions” is up from 2016 revenue of $73 million.
Song said the company will use that investment to continue to improve its technology in the battle to stay ahead of hackers, using what is called two-factor authentication to identify who is trying to access a computer or network; and will focus both on global expansion and on garnering more contracts with various federal agencies in light of all headlines involving Russian meddling and large data breaches.
Two of the investors in the recent funding round will help Duo expand its presence in Europe and Asia, Song said. Index Ventures is based in Switzerland, and Tokyo-based Geodesic Capital’s new fund of $335 million was raised to help U.S. firms reach Asian markets.
The company currently has offices in San Mateo, Calif.; Austin, Texas; and London. The Austin office is Duo’s fastest-growing; last year it increased headcount from 30 to 90 and went from 7,000 square feet to 23,400.
But despite the influx of capital from European, Japanese and Silicon Valley investors, and a growing national and international presence, Song is adamant that the company will remain headquartered in Ann Arbor. He jokes that Silicon Valley folks are wine drinkers, and that like others in Michigan, he’s a beer drinker.
Song says the company may even expand its brick and mortar presence in Michigan and open an office in downtown Detroit.
“We may. Some people thought the activity in Detroit was a dead-cat bounce, but what’s happening there is impressive and sustainable. We have customers there and it might make sense to support them and the city with an office,” he said.
In 2000, Song was one of five self-proclaimed geeks and hackers who co-founded Arbor Networks, a University of Michigan spinoff that would attract $33 million in venture capital over the next two years. By the time Arbor was sold to Texas-based Tektronix Communications in 2010, 80 percent of the world’s internet providers used its cybersecurity software.
He and Oberheide, another Arbor alum, then founded Duo Security.
Song has long been a mentor for would-be entrepreneurs in Ann Arbor, co-founding the Ann Arbor New Tech Meetup, a networking venue, and the Tech Brewery, an tech incubator. A skateboard buff, Song was chief organizer and fundraiser for the 30,000-square-foot Ann Skatepark on Ann Arbor’s northwest side.