How Silicon Valley's Arctic Wolf made it to Minnesota's 'Silicon Prairie'

A cybersecurity firm called Arctic Wolf Networks, based in Sunnyvale, Calif., recently received $60 million in venture capital from a couple of institutional equity investors.

The funds will help the 400-person firm double the size of its Eden Prairie office to 260 by 2021, local executives said.

Nick Schneider, who was hired in 2016 as chief revenue officer of Arctic Wolf, is a 15-year sales veteran of data-storage firm Compellent, now owned by Dell; and Minneapolis-based Code42. Schneider runs marketing, sales and customer service from Eden Prairie.

He said his hiring was conditioned on building a team from Eden Prairie, his neighborhood.

"Nick pulled off a coup," said Dan Larson, senior vice president of marketing, who reports to Schneider. "There is excellent talent here. And you can build a technology and cybersecurity company here in Minnesota. And people are more loyal here."

And it costs a lot less to employ people in Eden Prairie than Silicon Valley.

Larson, a central Minnesota native, once worked for Sunnyvale-based CrowdStrike, a granddaddy of the cybersecurity trade.

"We expect to double the number of employees in Eden Prairie within a couple of years," Larson said. "We also are building a security operation center here. The security employees who hunt down hackers and keep networks secure will also be here."

Today, about 130 of Arctic's 400 employees are based here. Only the Sunnyvale office is larger.

"Arctic Wolf brought the right mix of an experienced CEO and leadership team within the security space, strong financial backing … and a solution to a common issue for customers in a market that was growing exponentially," Schneider said in an e-mail.

Arctic, which doesn't quantify its financial performance, is one of the 25 fastest-growing companies in North America on Deloitte's 2019 Technology Fast 500. Its revenue, though unspecified, more than doubled between 2018 and 2019.

"Arctic Wolf's approach of providing businesses with dedicated experts who know their security landscape, and a predictable pricing structure they can understand, has resonated with organizations of all sizes who are looking to better secure their data," CEO Brian NeSmith said in a prepared statement last week. "This new round of funding will allow us to accelerate the growth of our business so that we can provide even more companies with the personal, predictable protection that Arctic Wolf is known for."

Arctic Wolf has raised nearly $150 million in venture capital over the last several years, according to data-collector Crunchbase.

The Twin Cities is neither Silicon Valley nor a backwater of the software industry.

Fast-growing JAMF, which manages Apple equipment for thousands of customer companies, and security-software firm Code42 are a couple examples in a successful software cluster that has slowly arisen over the last 20 years, in addition to the data operations of many big companies and spinoffs.

Arctic Wolf helps smaller companies hire cybersecurity experts and build security operations through Arctic software.

"Arctic Wolf brings true enterprise-grade security to businesses who would not be able to achieve it on their own," said Dmitry Dakhnovsky, managing partner at Stereo Capital, an investor in Arctic Wolf.

And that's the short story of how California's Arctic Wolf made it to Eden Prairie.

Neal St. Anthony • 612-673-7144