For startups expanding into the U.S., there are numerous hurdles to overcome, from product strategy to legal complexities to the logistics of establishing an office and local team. But for the right company at the right time, the move can be a major milestone and launching pad for global growth.
FTV has worked with a number of companies on their journey of growth into the U.S. market, and one such company is Egress, a leading cloud email security company based in the U.K. FTV led a $40 million investment in Egress in 2018 to further the company’s rapid growth in Europe, drive its expansion into North America and accelerate key product initiatives. Over the course of FTV’s investment, Egress grew substantially, leading to its successful acquisition by KnowBe4 in July 2024.
We spoke with Egress CEO and Co-founder Tony Pepper about what it took to establish the company in the U.S. and pitfalls founders should avoid when considering this move. Tony also shares how Egress approached product expansion, going from being a highly specialized email encryption product at launch to offering a suite of cloud email security solutions, while avoiding its product becoming commoditized by larger competitors along the way.
QUESTION 1
What problem was Egress trying to solve for customers when you founded the company in 2008?
We started Egress to address the challenge of securely sharing sensitive information via email, which was technically complex and had too many barriers. At the time, many organizations were more willing to risk sharing data insecurely rather than go through the pain of using a mechanism to share information securely. So, we created an easier way to protect sensitive information, while enabling users to track when recipients accessed it, much like a digital receipt.
We also added the ability to dynamically revoke access after an email left a sender’s environment, which at the time required a new cloud-based key management system. And then, about five years in, we expanded to behavioral-based use cases, adding capabilities that ensured emails went to the right people, preventing human error by email, as well as protection against sophisticated inbound phishing attacks.
QUESTION 2
In 2018 you decided to take funding from FTV. What were you looking to achieve?
For the first five years of Egress’ existence, we bootstrapped the company, focusing on developing our email encryption product before raising our Series A in 2014. By 2018, we saw that email encryption alone would soon become a commodity within larger company’s offerings, like Microsoft’s, and that we would need to expand our scope and product offering if we were going to stand the test of time.
So, we set out to tackle two key areas: building advanced behavioral use cases to detect accidental or malicious data disclosure and expanding into the U.S. market. Knowing that we wanted to establish a U.S. presence and customer base, it was critical that we had a U.S. investor. But we also needed a firm that was growth-oriented and had the experience and expertise to enable our success. That all led us to FTV.
QUESTION 3
How did FTV assist Egress in expanding into the U.S.?
FTV really supported us every step of the way. The FTV team’s patience was their greatest strength – they understood that we were iterating on both our product and our team. Initially, we tried to establish our U.S. presence in Boston, but when we couldn’t find the right go-to-market leadership fit, we pivoted to New York, where we found success.
Our instinct, like many tech companies, was always to build everything ourselves. But a critical turning point came when we decided to acquire a pre-revenue U.K.-based startup that had built a completely new approach to protecting against advanced social engineering attacks by email – the perfect complement to our cloud email security platform. This decision, supported by FTV, significantly accelerated our growth in both the U.S. and the U.K. The lesson: Don’t dismiss buying as a viable option. Acquiring niche tech and talent can quickly round out your offering, especially when you already have strong sales momentum.
QUESTION 4
How did you know the company was ready for the U.S. market? What hurdles did you have to overcome to successfully scale to the U.S.?
Many European and U.K. businesses start by attracting U.S. customers from afar but quickly need a local presence to drive growth, which brings its own challenges. For instance, choosing a U.S. headquarters was a big decision. We initially picked Boston because on paper it made sense – access to universities and talent, fairly easy to get to and relatively affordable.
But we soon learned that location doesn’t mean much without the right people. So, we pivoted and set up in New York as our go-to-market hub, alongside Boston, because that’s where we had strong connections. If you don’t have the right individuals on your team, then you’re never going to be successful no matter how good it looks on paper.
Perhaps counterintuitively, we also decided to prioritize hires based on a startup mindset rather than deep expertise in cyber. In fact, the sales leaders we hired in the U.S. had no experience in cyber, but having worked together previously we were confident that they could help accelerate our growth in the U.S. The lesson: You can provide product training and sector specific education, but what you can’t teach is grittiness, creative thinking and a desire to do what it takes to build and scale international teams.
QUESTION 5
How did you maintain that startup mentality while keeping alignment with the main headquarters?
To maintain connectivity and continuity with the U.K. business, hiring strong leaders was key. We learned that even with excellent individual contributors, without a great leader, the effort could fail. Another lesson was not to rely solely on U.S. hires to grasp all the nuances of a company based in the U.K. So initially, we also relocated top talent from the U.K. to New York.
Though counterintuitive to move our best people from a successful region, these “culture carriers” weren’t just top performers, they understood our operations and could ‘connect the dots’ effectively across all our departments. This approach was crucial when our U.S. office was still small and establishing its foundation.
QUESTION 6
What is a unique part of Egress’ culture that you’ve focused on and that resulted in benefits for the company over the years?
Egress has always valued promoting from within by hiring early career individuals and then giving them extensive training to accelerate their path to senior roles.
We learned the hard way by hiring experienced professionals at the wrong time, thinking their expertise would guarantee success. But some came with bad habits and weren’t a good fit for our culture. Initially, we really needed to hire for the right mindset and that gritty startup culture that you need. It wasn’t until we had a solid foundation and a larger team in the U.S. that hiring seasoned individuals became effective.
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