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Stackpath LLC

Stackpath LLC website LinkedIn
Computer & Network Security

"StackPath is a platform of secure edge services that enables developers to protect, accelerate, and innovate cloud properties ranging from websites to media delivery and IoT services. With an innovative global edge network infrastructure, StackPath delivers enterprise-grade security and performance in a frictionless, on-demand platform with cloud-scale control and flexibility. More than one million customers, including early-stage and Fortune 100 companies, use StackPath services. StackPath is headquartered in Dallas and has offices across the U.S. and around the world". Press release

See also Wikipedia entry.

Corporate Highlights

4/3/2019: Company announces new capabilities for StackPath EdgeEngine in press release.

IVQ 2018: WHF reports Company is under-performing and sponsor is providing new capital. (see Investment Highlights).

7/27/2018: Update in Dallas Magazine, where CEO Lance Crosby was named finalist in EY Entrepreneur of the Year:

"After selling SoftLayer to IBM for $2 billion in 2013, Lance Crosby set out to explore another industry: cybersecurity. Three years later he launched StackPath, which offers a suite of cybersecurity services, with a $150 million investment and the acquisition of four companies.

Since then  he’s made another acquisition and merged with London-based Server Density. In between the M&A activity, he’s grown StackPath organically by 40 percent, ending 2017 with a run rate of $250 million. “It’s like changing the tires on a car during the NASCAR race and not pulling over in the pit stop,” Crosby says.

StackPath—which employs 450 people (including 100 in Dallas), serves more than a million customers, and offers four services—is expected to offer 12 services by year’s end".

5/30/2018: Company merges with Server Density.

1/31/2018: Company announces very fast growth

7/25/2016: Company launches into security-as-a-service market, according to trade publication.

The company is emerging out of stealth today with a whopping $180 million in funding plus four significant acquisitions right out of the gate — MaxCDN, Fireblade, Cloak and Staminus — to launch a security-as-a-service platform but also fill out its network with customers. MaxCDN alone brings 16,000 customers to the new startup, and Cloak brings 15,000.

The funding is led by $150 million from ABRY Partners, the big private equity firm, along with a further $30 million from unnamed “insiders” the company tells me. It’s not clear whether the acquisitions are being made out of that funding or if they are separate to this. The financial terms, and valuation of StackPath, are not being disclosed..

StackPath  is not your ordinary security startup. For starters, it is founded by Lance Crosby — the founder and CEO of SoftLayer, which was acquired by IBM in 2013 for $2 billion, forming the basis of its new-wave cloud computing business. And second of all, is the company’s main premise. The company is banking on the premise of building a massive security platform, and going big with a flexible SaaS-style product, as a key part of how it tackles the issue of security.

BDC Credit Reporter View

4/4/2019: We've been worried about StackPath since the second lien debt position was written down for the first time in IVQ 2018 and discussed on WHF's Conference Call in March 2019. The business is under-performing due to "competitive dynamics in the marketplace", which tells us very little, except to be concerned. As a result, we've been keeping an eye out for any news, including the just announced new capabilities for its EdgeEngine. This may not make any material impact on results but suggests the Company remains active in the data center market.

We know next to nothing about the capital structure of StackPath but several of the ingredients of this company are cause for concern. First, the business is new, effectively launched only in 2016. Second, growth has been achieved by multiple mergers and has been at a very rapid pace. (See Corporate Highlights). Finally, WHF is in a second lien position. Fourth, the business appears to have very recently hit a large pothole of some kind. We may be watching developments here from some time but have no reason as this point to expect any kind of eventual loss to occur.

Highlights

IVQ 2018: WHF writes down position by (16%). We add Company to Watch List. On 3/6/2019 Conference Call WHF said:

"StackPath had financial performance deterioration that was related to competitive dynamics of the marketplace...the performance fell, the private equity firm that owns the company is actively engaged in improving the situation. And they have conviction that they can improve it and because of that conviction they're investing new equity behind us in the capital structure as a part of that turnaround effort".

IIQ 2017: WHF initiates exposure with $18mn position in 2024 second lien loan.