This story is part of our Inno on the Road series, where we take a look at innovation hubs throughout the Midwest. Check back all week for more coverage on Ann Arbor’s tech and startup scene.
When Dug Song set out to launch Duo Security, a SaaS company that helps organizations defend themselves against cybersecurity breaches, he already had some experience with building companies in Ann Arbor, Mich.
After graduating from the University of Michigan in 1998 with a bachelor’s in computer science, he became somewhat of a serial entrepreneur, helping to bootstrap other security companies and building incubators for the area’s startups.
So when he launched Duo with co-founder Jon Oberheide in 2010, he knew exactly what it took to build a company, a big reason why it has been so successful. Just in October, Duo became Ann Arbor’s first tech unicorn when it crossed the $1 billion valuation mark. To celebrate, the staff wore unicorn masks and horns around the office, Song said.
“We’re proud of the achievement, but for us, it’s more about what we’ve been able to do for our customers,” Song said.
Duo’s software helps companies protect themselves from breaches by verifying the identity of users and the health of their devices before granting them access to data and apps. Song has managed to capitalize on a crucial market need since most companies have an online presence in some form.
Duo has more than 10,000 customers, which include tech giants like Facebook and Yelp, but also other major companies operating in different industries, like Toyota or True Religion.
“Because anything of value these days sits in some kind of server somewhere, [breaches] have become the most lucrative form of crime,” Song said. “We have really focused on solving security where it sits today, which is at the intersection of people and technology.”
Cybersecurity will only become more important as the world’s businesses continue to digitize, and investors seem to be wise to this fact, too. When Duo hit unicorn status, it was sparked by a $70 million Series D funding round, led by Palo Alto, Calif.-based Meritech Capital Partners and New York-based Lead Edge Capital. The funding was the largest round of venture-capital that any company has raised in Michigan history, reported the Detroit Free Press. Duo now has a total of $119 million in funding.
Their board of directors include former executives at companies like eBay and McAfee, and they currently employ more than 500 people across four offices globally, with about 350 working out of Ann Arbor.
“There’s a lot of companies and a lot of talent that exists outside the Valley, but you never hear about it,” Song said. “Talent is equally distributed, but opportunity is not. There’s just as much amazing stuff that comes out of places like Ann Arbor as San Francisco.”
And Song is betting that Duo’s unicorn status can help shine a light on the innovative work going on in Ann Arbor. He said the news could help attract more investors and even other entrepreneurs to the city, establishing it as a place where tech startups can thrive.
With fresh talent coming out of the University of Michigan and local angel investors willing to help companies get off the ground, Ann Arbor is more equipped now than ever to be home to tech and startup companies, and Song attributes much of Duo’s success to that. Song may have been able to build Duo in another, bigger city, but Ann Arbor was just right for his mission and the kind of people he wanted to build it with.
“Why we’re successful comes from where we were born,” Song said. “Ann Arbor is about two things: Learning and football. You either win as a team or you lose as a team. Everything else is just friction.”