Sacra estimates Valimail hit $30M of annual recurring revenue (ARR) in Q2'2024, up roughly 60% year-over-year, with gross margins of about 70%.

Recent requirements from Google and Yahoo for improved email deliverability, effective February 2024, have provided substantial tailwinds for Valimail's core business.

Valimail's growth trajectory shows steady progression from $9M ARR in 2019 to approximately $17M by 2023. The company's 2019 strategic partnership with Microsoft—which made Valimail its preferred partner in DMARC authentication—has been instrumental to its 3x growth between 2019 and 2024.

The company's revenue mix is heavily dependent on channel partnerships, with Sacra estimating that 50-60% of revenue comes through managed service providers (MSPs) and other partners, similar to Proofpoint's channel mix at IPO. Valimail maintains a network of roughly 100 channel partners, including Twilio, Pax8, and Symantec.

Valimail has raised a total of $84 million in venture funding since its founding in 2015. The company's most recent funding was a $45 million Series C round led by Insight Partners in 2019.

Key investors include Insight Partners, Tenaya Capital, and Shasta Ventures. Earlier investors Bloomberg Beta and Flybridge Capital Partners participated in the company's seed round.

Valimail was founded in 2015 by Alexander Garcia-Tobar and Peter Goldstein to solve the complex problem of email authentication and domain protection. Garcia-Tobar previously served as VP of Business Development at email security company Agari, while Goldstein brought technical expertise from senior development positions at RSA Security.

Valimail found product-market fit as an automated DMARC implementation solution for large enterprises struggling with email authentication. Their timing coincided perfectly with Google's introduction of email authentication flags in user inboxes, creating urgent demand from organizations needing to achieve DMARC compliance to prevent their emails from being flagged as suspicious.

The core product, Valimail Enforce, automates the process of implementing DMARC authentication through a one-time DNS update. When an email is sent claiming to be from a Valimail client, it's checked against Valimail's system before delivery. The system maintains an automatically updated list of approved senders for each company, allowing legitimate emails through while rejecting unauthorized ones.

For IT teams, Valimail eliminates the complex, manual work typically required for DMARC implementation. The platform's "Instant SPF" technology bypasses traditional SPF's 10-domain lookup limit, enabling customers to authorize new senders with a single click rather than through time-consuming DNS updates.

Valimail later expanded its product line to include Monitor (a free DMARC visibility tool), Align (for Google/Yahoo compliance), and Amplify (for brand logo display in email clients), building on their core expertise in email authentication automation.

Valimail is a SaaS company that provides automated email authentication services through a tiered product strategy, with pricing based on domain volume and features needed. The company's core offering helps organizations prevent email spoofing and improve deliverability through DMARC implementation, a critical but technically complex email security standard.

The company employs a freemium go-to-market model centered around Valimail Monitor, a free tool that provides basic DMARC monitoring and reporting. This serves as a low-friction entry point, particularly for Microsoft Office 365 users through a strategic partnership. Organizations requiring full DMARC enforcement capabilities can upgrade to Valimail Enforce, which starts at $5,000-$8,000 annually and increases based on number of domains and email volume.

Valimail's business model leverages strong channel partnerships, particularly with Microsoft, which drives 50-60% of revenue through referrals. This mirrors successful models from email security companies like Proofpoint. The company's automated approach differentiates it from competitors by eliminating manual configuration processes - customers can authorize new email senders with a single click rather than complex DNS updates.

Valimail operates in the email authentication and security market, which includes both established email security platforms and specialized DMARC providers.

Large platforms like Proofpoint, Mimecast, and Cisco dominate the broader email security market, offering comprehensive suites that include spam filtering, anti-phishing, and basic DMARC capabilities. These companies capture significant market share through established channel partnerships and integration with popular email platforms. Proofpoint and Mimecast together controlled 30% of the $3.7B email security market in 2020, with Proofpoint reaching $1.2B in revenue in 2021.

A growing segment of specialized providers focuses exclusively on DMARC implementation and management. Key players include Agari (now part of Fortra), dmarcian, Red Sift, and PowerDMARC. These companies typically offer both free DMARC monitoring tools and paid enforcement solutions, similar to Valimail's Monitor/Enforce model.

Major email platforms are developing native DMARC capabilities. Microsoft Defender for Office 365 is working on DMARC reporting features, while Google Workspace includes basic DMARC authentication. However, these built-in tools often lack the advanced management and automation features of dedicated solutions.

The market is seeing increased consolidation, exemplified by Fortra's acquisition of Agari and Cofense's purchase of Cyberfish. This trend, combined with new requirements from Google and Yahoo mandating email authentication by 2024, has accelerated demand for DMARC solutions, particularly among enterprises seeking automated implementation tools.

Valimail has tailwinds from the rapid rise in sophisticated phishing attacks and new email authentication requirements from major providers like Google and Yahoo, with opportunities to expand into adjacent markets beyond its core DMARC implementation services.

The shift toward cloud-based email and proliferation of SaaS services has created an increasingly complex email authentication landscape. With organizations using dozens of third-party services to send email on their behalf, Valimail's automated authentication platform becomes more valuable. The company's "Instant SPF" technology, which bypasses traditional SPF lookup limits, positions them to capture more of the broader $3.7B email security market currently dominated by legacy providers like Proofpoint and Mimecast.

Valimail's support for Brand Indicators for Message Identification (BIMI) opens up opportunities in the marketing technology space. By enabling brands to display their logos in email clients, Valimail can help drive increased engagement and deliverability - key priorities for marketing teams. This positions them to expand beyond pure security into email marketing optimization, a $2B+ market growing at 13% annually.

As organizations struggle with shadow IT and unauthorized cloud services, Valimail's visibility into email sending patterns positions them to expand into broader identity and access management. Their existing integration with Microsoft and ability to detect unauthorized service usage creates natural expansion opportunities into the $13.4B identity governance market, particularly for cloud-first enterprises seeking better control over their SaaS environments.

Three key risks for Valimail:

Overreliance on Microsoft partnership: Valimail's growth has been heavily driven by its Microsoft partnership, which provides free DMARC monitoring to Office 365 users. While this has enabled rapid customer acquisition, it also creates significant dependency risk. If Microsoft were to build native DMARC capabilities or partner with another provider, Valimail could lose its primary distribution channel and face challenges maintaining its growth trajectory.

Low monetization of free users: With 65,000 customers but only $30M in ARR, Valimail's average revenue per customer of ~$430 is substantially below industry peers like Mimecast ($10,000-20,000). While the large free user base represents expansion opportunity, it also suggests potential challenges in converting users to paid products. The company needs to prove it can successfully monetize its broad but shallow customer relationships.

Commoditization of core offering: As major platforms like Microsoft Defender, Sophos, and Cisco add native DMARC capabilities, Valimail's core differentiation around automated DMARC implementation could erode. The company may need to expand beyond pure authentication into adjacent security areas to maintain growth and avoid margin pressure, but faces well-funded incumbents in those broader markets.