In 2016, a new name quietly entered the crowded cyber security solutions market. More than your average MDR, Field Effect’s holistic cyber security solution, Covalence, leverages the elite knowledge of its former Canadian cyberspy co-founders, Matt Holland, CEO, and Andrew Loschmann, COO, to bring a new approach to one of the modern world’s most challenging problems – protecting underserved small and midsize enterprises all over the planet from pervasive cyber-attacks. Investors appear to believe what Holland knows to be true: nobody in the cyber security market has what Field Effect has built.
Field Effect was entirely bootstrapped until late 2022, when the company burst into news headlines after raising $34.5 million in Series A financing backed by Edison Partners and Round13 Capital. Series A funding rounds typically raise $10 to $20 million, according to Forbes. This month, the company announced a new phase in its growth – a robust CAD$30 million (US$22 million) debt facility from Scotiabank’s Technology Innovation and Banking Group for strategic acquisitions and global expansion.
2 Decades Of Elite Intelligence Knowledge In One Advanced Platform
Holland says that solving really hard problems is in Field Effect’s DNA. The company’s roots stem from Holland’s and Loschmann’s experiences working at the Canadian intelligence agency Communications Security Establishment, as part of the Five Eyes intelligence community in 2000. Seven years later, Holland co-founded and bootstrapped Linchpin Labs, an intelligence tradecraft company that built tools and tradecraft techniques that Holland discreetly suggests “would be of interest to allied Five Eyes governments to continue intelligence missions.”
In 2009, he reverse-engineered his deep intelligence expertise to build a new segment of work focused on defensive capabilities. But this time, not for governments, nation-states or large enterprises with big cyber security budgets. “We concluded that the small to midsize enterprises (SMEs) space was a much harder problem, because they don’t typically have large IT or security teams because security people are extremely expensive and largely cost-prohibitive,” Holland explains. How do you reach the most SMEs in the world? Through their MSP or MSSPs. “So, it’s solving the cyber security problem for SMEs,” Holland says, “but what gets our heart pounding with excitement is when we can help an MSP transform the business or unlock more margin.”
In 2016, Holland’s defense company split from Linchpin Labs into its own entity – Field Effect. Two years later, he sold Linchpin Labs as part of a bundled deal alongside its partner company Azimuth for $200 million. With the sales, Holland accelerated Field Effect’s growth. “We started working on our solution that we bring to MSPs today – before CrowdStrike was even a company,” Holland says. “The ability to self-fund that growth allowed us to build, refine and bake something better over time.”
Today, Field Effect orbits around its holistic MDR platform and services stack, Covalence, a modern MDR unlike any other on the market. “What we’ve built is a technology that includes machine learning and analytics that knows when to bring humans into the fold and starts triaging things differently,” Holland explains, adding that the model is also uniquely scalable. Despite growing from 100 to more than 1,000 customers over the past two years, Field Effect employs nearly the same number of skilled frontline analysts. “I would say no one else has figured out how to scale a really good cyber security service without adding more people to the degree that we have,” he says. “At the same time, we keep improving the service and making it better.”
Jeff Farr, owner and CEO of cyber security and compliance firm SERA BRYNN, started working with Field Effect two years ago, after a client was hacked while using a well-known cyber security solution. He found Field Effect via a Google search, and today he requires Covalence in every client package.
Covalence’s most outstanding features, Farr says, are its speed, lack of noise and cost savings. “Covalence has virtually no false positives, saving me a lot of manpower. It goes outside the boundaries of a traditional MDR and catches things the other tools weren’t catching,” Farr explains. Covalence provides DNS filtering, vulnerability scanning, and catching things like impossible travel, and it alerts a business when someone registers a similar domain name. “That’s very rare for an MDR,” he says.
Still, excellent technology isn’t the be-all and end-all for the growing cyber security company. To carve its space out as the leading cyber security resource for MSPs and SMEs, Field Effect ensures its support team is just as proficient as its platform. “Field Effect’s level of customer support is unmatched by any vendor we’ve ever worked with,” says Tom Andrulis, CEO of Intelligent Technical Solutions, a security-focused managed services provider that’s worked with Field Effect over the last few years. “It’s so high-touch; they are really in it to help us grow, succeed and do well.” For an MSP that’s shifting more into the MSSP world, having Field Effect’s knowledge on hand goes a long way. “We have some internal cyber security experts, but we haven’t written a platform like Field Effect has. To be able to lean on their expertise, and also utilize the platform, has made a significant difference for us,” Andrulis says.
Field Effect Transforms Challenge Into Opportunity For MSPs
Though Field Effect maintains its Canadian-rooted humility, it employs 185 professionals, and revenues are growing at an impressive 75% annually. Over the next few years, Field Effect’s focus is on expanding into global markets and securing as many SMEs as possible. In an interview with Betakit, Holland said the company’s acquisition strategy would be a “very predictable and reliable formula” for acquiring MSPs and having them adopt Covalence.
“We absolutely love helping MSPs build value,” says Holland. “And our interest is long-term relationships and making the cyber security challenge – one that used to be scary – more of an opportunity for MSPs.”