Cybersecurity Private Equity

Cyber TRUST™ Index



52 Week



Index at 100 on January 1, 2020


The Highs and Lows of Cybersecurity Startup Tanium

Cybersecurity startup Tanium is an interesting story because of the company’s extreme highs and lows. The firm is currently a cybersecurity industry leader thanks to its innovative solution that integrates security, risk, compliance, and IT into a single platform, but the road to success hasn’t always been smooth.

The company was founded by the father and son team of Orion and David Hindawi in 2007 and quickly secured some reputable clients like El Camino Hospital in Santa Clara, California. Some questionable decisions by leadership in the company’s early days created tension with both customers and employees, though, and nearly led to Tanium’s downfall.

Tanium appears to be back on track and could advance toward an initial public offering (IPO) in 2023 or 2024, despite its early problems. This guide explains the highs and lows of cybersecurity startup Tanium and examines some lessons other startups can learn from this firm.

Tanium’s Current Success

There’s no doubting Tanium’s success in the industry, as the firm is experiencing significant growth. Investors are carefully watching the company as it evolves, and there will be considerable interest if Tanium goes public. Some examples of success include the following:

$9 Billion Valuation

We don’t have an accurate current valuation for Tanium, but the latest number from October 2020 was $9 billion. That number came on the heels of a $6.5 billion valuation in 2018, so the company is clearly thriving as a cybersecurity unicorn. 

High-Profile Customers

Tanium has some high-profile customers that trust its services, including many Fortune 100 companies and five branches of the United States military. Having these clients in its portfolio will be good for business moving forward as long as the firm can keep them happy.

IPO Candidate

Speculation on an IPO has been around for years, with leadership hinting at the move in 2017. The 2023 hiring of a new CEO, Dan Streetman, could point toward an IPO in the near future because of his experience helping firms like Allvue Systems and TIBCO Software expand in the past.

Tanium is a cybersecurity startup success story that other founders could look to emulate. The company is well positioned in the marketplace but did encounter some bumps along the way.

Seven Lessons Startups Can Learn From Tanium

It’s easy to look at Tanium’s valuation and think everything was easy for this startup, but nothing could be further from the truth. The company is no stranger to turmoil, and its story could provide some valuable lessons for other startups. Lessons founders can learn from Tanium include the following:

1. Be Ethical

One of the main problems Tanium experienced was due to unethical behavior. The company found itself in hot water in 2017 after word got out regarding its unauthorized use of El Camino Hospital’s systems in demonstrations presented to other potential customers between 2012 and 2015. Tanium didn’t have permission to use the hospital’s systems in these demos, creating friction with customers and potential backlash from investors.

2. Communicate With Your Customers

Tanium could have avoided many of its issues with its customers by communicating and being up front with them. There’s a chance El Camino Hospital would have been fine with the startup using its systems in its demos, assuming they protected all data, but Tanium didn’t communicate its intentions with the hospital. Startups can avoid issues by being up front with customers when using their property.

3. Be Careful With Your Demos

Another issue Tanium ran into with its demos was the presence of private data. The company posted videos of the demos online, too, leaking sensitive hospital information to the public. Double-checking the videos and removing identifiable information before posting them could have prevented this problem. 

4. Watch the Culture

Rumors of a culture problem within Tanium arose around the same time as the issues with El Camino Hospital. Nine senior executives left the company within an eight-month period in 2017, and some employees claimed the organization fired them before they could cash in their stock options. Past employees have also commented on a toxic workplace culture created by former CEO Orion Hindawi, which startups will want to avoid. 

5. Stick With It

These problems could have sunk Tanium, but the company stuck with it and is now a success story worth emulating. The organization won three categories at the 2023 Cybersecurity Excellence Awards and is now recognized as one of North America’s most innovative industry leaders. Startups can learn that development isn’t always linear and there’s always hope when the company has goals and a vision.

6. Identify Cybersecurity Problems

The main reason Tanium is succeeding is the company’s ability to identify persistent endpoint security problems for businesses all over the world. Startups should always look for pain points potential customers are experiencing because the industry evolves incredibly quickly. Tanium’s ability to adapt to these changes is largely responsible for its recovery.

7. Provide Solutions

The other reason for Tanium’s recovery is its ability to solve these pain points. Businesses will spend over $188 billion on cybersecurity in 2023, and many don’t have solutions providing adequate protection. It’s up to startups to create those solutions and take a significant piece of the market through their innovations. 

Learning from the successes and failures of Tanium can better position the next generation of cybersecurity startups. The result could be more innovation and fewer highs and lows for these organizations as they enter the market. 

Funding a Startup

Tanium has raised over $1 billion from various investors over the years and used those funds to fuel its growth. Startups at all stages should be seeking investor funds to assist as they develop a vision and reach their goals. Looking for investors who understand the industry and its intricacies could provide superior results because they recognize where the field has gaps these developers can fill.

Option3 identifies investment whitespaces and underinvested frontiers, bringing startups and investors together to solve complex cybersecurity issues. We have decades of experience in the investment and cybersecurity industries, giving us the expertise to create growth opportunities for startups. Contact Option3 for more information on cybersecurity investment.


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