22. Arctic Wolf

Founders: Brian NeSmith, Kim Tremblay
CEO: Nick Schneider
Launched: 2012
Headquarters: Eden Prarie, Minnesota
Funding: $899 million
Valuation: $4.3 billion
Key technologies: Artificial intelligence, cloud computing, deep neural networks/deep learning, software-defined security
Industry: Cybersecurity
Previous appearances on Disruptor 50 List: 1 (No. 17 in 2022)

Arctic Wolf, an Eden Prairie, Minnesota-based cybersecurity company, wants enterprise clients to embrace the concept of security as they do many other key software vendor suites. Instead of corporate cybersecurity taking a one-off approach to protecting assets, tool by tool, and a gap between the tools and staff, Arctic Wolf has described what it is trying to build as a cybersecurity version of what Salesforce or Workday offer to enterprise clients.

Its cloud-based platform, built to ingest data from widely used sources across endpoints, networks and clouds to provide automated threat detection and responses and cut down on false alerts, has served banks, hospitals and municipal governments. Interactive training, coaching and mini-lessons are part of a managed security approach building — "security as a concierge service" — a centralized operations platform internally for an organization's overall monitoring of threats.  

Arctic Wolf Labs claims to monitor trillions of security events each week. 

Its approach also tackles the daunting cyber skills gap, where there are still as many as 700,000 open positions even as tech hiring goes through its biggest downturn since the dotcom bust. Its research has found that the majority of organizations see lack of sufficient cyber talent as the No. 1 threat.  

Enterprise spending is on the decline, and Arctic Wolf has not been immune from the negative headlines. Local Minnesota press have reported on a small staff reduction — the company says stemming from an acquisition and not related to slowing growth. There have been reports it was working on an IPO since early 2022, but the public offering market has frozen for startups. When it recently raised $401 million, it was in convertible debt, a form of financing more highly valued private firms have had to turn to as equity funding market dried up.

But cyber spending is among the more resilient niches within the IT budget. According to a Citi survey of chief information officers from January, there will be a slower growth rate for tech spending — well below the Covid peak and below the historical average, and down from Citi's last forecast in the Fall — but still representing a modest rate of growth, and cybersecurity better positioned than other items in the more closely watched budget.

Stricter regulation related to corporate hacks coming from the government, both the Securities and Exchange Commission and Biden administration, will add to the pressures that companies face in having adequate cyber defenses.

And the threats, if changing all the time, keep coming, aided by firms leaving themselves far too vulnerable without basic cyber hygiene practices in place. Ransomware, while still widespread, has declined — according to Arctic Wolf, the Russia-Ukraine war has taken out key threat actors. But its latest analysis finds that business email compromise attacks accounted for more than a quarter cases the company had to respond to last year. And over half of the companies falling victim to the attacks didn't have multi-factor authentication enabled.