Privately held software maker Tenable Network Security Inc said on Tuesday it is raising $250 million in venture capital funding, a record-sized round for a cyber security firm.
Proceeds from the Series B round, which was led by Insight Venture Partners and existing investor Accel, will be used to fund product development, international expansion and marketing, said Chief Executive Ron Gula.
"It's a big raise. We realize that," Gula said. "We are investing across the board."
Tenable executives declined to discuss the valuation of the company that sells software that businesses and governments use to monitor networks for weaknesses and cyber threats. Rivals include Rapid7 Inc (RPD.O) and Qualys Inc (QLYS.O).
The previous record for a cyber funding round was $225 million raised in 2013 by AirWatch, which was later acquired by VMware Inc (VMW.N), according to CB Insights. Insight Venture Partners and Accel were also involved in that deal.
The deal, which Tenable expects to close in December, comes at the end of a year in which cyber security companies have taken advantage of investor enthusiasm for their sector.
Analysts expect sales of cyber firms to outpace the broader high-tech sector as businesses and governments invest in new technologies to protect against increasingly devious hackers.
Venture funding in cyber firms is poised to beat last year's total of $2.5 billion, which was up from $1.7 billion in 2013, according to a Reuters analysis of data from CB Insights and Bain Capital Ventures.
"The cyber security market has expanded in a way that quite frankly very few of us anticipated," said Ping Li, a general partner with Accel and member of Tenable's board.
Accel invested $50 million in Tenable in a 2012 Series A round.
(Additional reporting by Heather Somerville and Kshitiz Goliya; Editing by Miral Fahmy)