YL Ventures is an early-stage firm that funds and supports visionary cybersecurity entrepreneurs from seed to scale to help them evolve transformative ideas into market-leading companies. Pulse 2.0 interviewed YL Ventures partner Justin Somaini to learn more about the firm.
Justin Somaini’s Background
What is Somaini’s background? Somaini said:
”Driven by the profound impact of cybersecurity, I’ve dedicated my 30-year career to tackling its evolving challenges. Witnessing the increasing sophistication of threats motivated me to be part of the solution. My journey spans leadership roles at Unity Technologies, SAP, Box, Yahoo!, Symantec, VeriSign, Charles Schwab, and PwC, giving me a unique, well-rounded perspective across industries and functions.”
“This holistic understanding allows me to see organizations as a whole, recognizing the needs of every team. I excel at bridging the gap between security and other departments, collaborating to achieve buy-in for practical solutions. Beyond corporate roles, I founded Somaini LLC, a strategic security management consulting firm, and advised numerous security companies.”
“I was the second advisor to join YL Ventures’ Venture Advisory Board over a decade ago, and have since been impressed with the remarkable value the firm provides to its founders. One year ago, I joined the firm in a full-time Partner position, leveraging my experience and knowledge to bring my own value and empower our founders, helping expedite and enrich their journey. I offer insights during ideation and GTM phases, facilitate customer relationship building, and contribute to achieving product-market fit and global expansion. My storied CISO background provides a valuable customer perspective, helping identify critical problems and lucrative market opportunities.”
“I translate my passion for cybersecurity and proven leadership into strategic guidance for the next generation of security solutions.”
Evolution Of YL Ventures’ Thesis
How has YL Ventures’ thesis evolved over time? Somaini noted:
“Since 2007, YL Ventures has been a launchpad for exceptional cybersecurity entrepreneurs, fueling their journeys from nascent ideas to market dominance. With a dedicated value add approach and a bullish investment strategy in early-stage cybersecurity startups, we empower founders to build category-defining companies that tackle today’s most pressing cybersecurity challenges. The firm has been consistent in its approach to supporting the most exceptional and experienced founders, possessing both outstanding technical brilliance and an unwavering drive for leadership and business success, who aspire to solve the most urgent and unrelenting problems in cybersecurity. We handpick them based on their potential to reshape the cybersecurity industry with their innovative solutions.”
“When the firm began investing in 2007, we looked at various technological sectors, but over the years we doubled down on cybersecurity. Our longstanding, singular focus on this dynamic and vibrant sector has significantly expanded our experience, reach, network and profound proficiency in cybersecurity. This deep domain knowledge is incredibly valuable for founders with aspirations for category leadership, and also for us as investors who know how to recognize a strong cybersecurity team, the needs of customers in our sector and the acute problems they are contending with.”
Significant Milestones
What have been some of your firm’s most significant milestones? Somaini cited:
“Witnessing the growth and evolution of our portfolio companies from the most nascent stages to strong category leaders is a milestone, every time. The firm has a track record of seeding cybersecurity unicorns such as Axonius and Orca Security and its portfolio companies have been successfully acquired by high-profile, global industry leaders including Palo Alto Networks, Microsoft, Okta and Proofpoint.”
“This is a strong testament to the firm’s dedication to bolstering top-tier cybersecurity talent. Another significant milestone indicative of our strategy’s performance is that PitchBook has ranked YL Ventures as one of the ten best-performing venture capital firms for two consecutive years (2022, 2023) in its prestigious Global Manager Performance Score League Tables. The firm is the only cybersecurity-focused VC to secure a Top 10 spot on the list.
Investment Success Stories
After asking Somaini about the firm’s investment success stories, he highlighted:
One of our most compelling stories begins nearly a decade ago with Twistlock. In 2015, YL Ventures led the seed round for what became a cloud-native security powerhouse. That’s when we first met Ben Bernstein, Dima Stopel and John Morello, visionary founders who saw where the industry was heading before anyone else. Their ability to execute with precision and scale set a new bar. Twistlock’s rapid rise and eventual acquisition by Palo Alto Networks in 2019 proved that when the right team tackles the right problem at the right time, extraordinary things happen.”
“When Ben, Dima and John came to us with a new venture, we knew exactly what they were capable of. Despite strong competition from top-tier firms, they chose to partner with us again, drawn to the kind of hands-on support they valued during the early Twistlock days.”
“Minimus is tackling one of the biggest bottlenecks in modern software security. Beyond just identifying vulnerabilities, Minimus eliminates them before they ever make it into production. While most solutions focus on surfacing and prioritizing issues, Minimus is rethinking the supply chain altogether. Their platform delivers production-grade, vulnerability-free containers built from the most popular open source stacks, eliminating over 95% of vulnerabilities before a single line of code is written. For the remaining edge cases, Minimus provides clear, actionable guidance to address what’s left, starting with what matters most.”
“Unlike others in this space, Minimus isn’t trying to be an infrastructure company that happens to touch security. They are a security company, full stop. They’ve taken the hard road – engineering trusted containers from the ground up rather than just repackaging what’s already out there. And that decision is exactly what makes their vision so transformative.”
“As with Twistlock, we’re backing a world-class team with a deep understanding of the problem space and a rare ability to execute. Minimus isn’t just another vulnerability management tool. It’s a reset button for how we think about application security in the age of open source and cloud-native development.”
AUM And Other Metrics
Upon asking Somaini about assets under management (AUM) or any other notable metrics (i.e. dollars returned or enterprise value created), he revealed:
“YL Ventures is currently investing out of its fifth fund of $400 million raised in 2022, bringing our assets under management to $800 million. YL Ventures’ 2017 fund, YLV III, invested approximately $130 million in seven portfolio companies. As of July 2024, its impressive interim results place it among the top-performing VCs worldwide, coinciding with Pitchbook’s consecutive two-year ranking of YL Ventures in the top 10 out of over 250 global VC firms in its 2022 and 2023 Global Manager Performance Score League Tables.”
Industry Focus
What are some of the industries that your firm is focused on? Somaini emphasized:
“We focus on investing in strong founding teams that solve a large, unaddressed and persisting problem in cybersecurity. We have doubled down on cybersecurity seed stage startups in the past several years due to the remarkable impact their solutions have on the global market and the acute need for innovative solutions in light of the rapid shifts and evolution in technology.”
Differentiation From Other Firms
What differentiates YL Ventures from other firms? Somaini affirmed:
“While many VCs cast a wide net, YL Ventures is laser-focused on cybersecurity, allowing us to offer unparalleled expertise and personalized support to early-stage startups. We don’t just invest; we become active partners, devoting exceptional time and resources to ensure the success of our portfolio companies from seed to IPO. Imagine having a global team of experts dedicated to your company, not just one assigned contact. Our multidisciplinary team offers hands-on support across Go-to-Market strategies, marketing, sales and product-market fit. We introduce our founders to customers, guide them through sales cycles, secure follow-on funding, connect them with strategic partners, actively help them recruit top talent and build a powerful brand. This deep engagement across various domains distinguishes us from other seed-stage VCs.”
“Furthermore, YL Ventures has one of the largest and most impressive rosters of venture advisors in the industry. Our extensive network includes over 100 industry leaders from major companies, cybersecurity professionals and connections to top-tier investors. This network provides valuable advice, potential investments, customer opportunities, and connections for future funding rounds. We understand that every startup is unique, so we tailor our support to each company’s specific needs, stage, and preferences.”
“YL Ventures offers an unmatched combination of industry focus, deep engagement, industry connections, and a flexible, personalized approach. We go beyond just investing; we become an active partner for growth, helping our founders navigate the challenges and seize the opportunities that lie ahead.”
