A day after Minneapolis-based NetSPI raised a $410 million growth investment from private equity giant KKR, Eden Prairie, Minnesota-based Arctic Wolf raised $401 million in convertible notes led by existing investor Owl Rock. Convertible notes are something that could become more en vogue as the venture capital pullback continues (something we mentioned months ago). They work like a short-term loan, but convertible notes are repaid to the investor at a later point in equity'i.e. after an IPO'typically at a discount and can also include an interest rate. However, this is a much different time than July 2021 when it comes to venture capital and the public market. Funding to VC-backed cybersecurity startups is not nearly on the pace it was last year when it hit an all-time high of nearly $23 billion. Through the first half of this year, startups had raised $10.3 billion, according to Crunchbase data.
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