How March Capital Scored a Billion Dollar Return on CrowdStrike

CrowdStrike shares surged more than 13% Thursday after the Sunnyvale-based cybersecurity company once again reported blockbuster earnings. The stock is now up 184% this year, eclipsing the 38% gain for the rest of the Nasdaq.

CrowdStrike's blistering performance is a big win for March Capital, the Santa Monica venture firm focusing on enterprise software founded by Jim Armstrong, Jamie Montgomery, Gregory Milken and Sumant Mandal in 2014.

March Capital invested $26.5 million in the company's Series D round in 2017 at a post money valuation of $1.02 billion and another $39.7 million in the Series E financing in 2018 at a $3.35 billion post money valuation.

When CrowdStrike went public in 2019 at a $6.69 billion valuation, March Capital not only held onto most of its shares, but added to its stake.

After the run up in CrowdStrike's stock price, March Capital has reaped a return on paper of over $1 billion on its 6.8 million shares. CrowdStrike's market cap is now over $35 billion.

"For a new fund, it's a great way to start things," said founder and Managing Partner Jamie Montgomery. "It's hard to top that."

The windfall – on paper for now – illustrates how VCs can score big returns for their investors even if only a single company in their portfolio scores a home run.

However, Montgomery said that is not the case with his fund, which he pointed out has eight other breakouts in its portfolio of 36 companies including ASAPP, Forter, Uniphore, and Earnin as well as BillDesk and CarTrade in India.

The firm also boasts exits such as the cloud-delivered SD-WAN company VeloCloud, which was acquired by VMware in 2017, and TeleSign, a security company acquired by BICS the same year.

March Capital recently closed a $365 million Fund III, according to SEC filings.

Montgomery first met CrowdStrike co-founder and CEO George Kurtz when he was founder and CEO of Irvine-based Foundstone, an early cybersecurity company that was acquired by McAfee in 2004. After six years as a senior executive at McAfee, Kurtz co-founded CrowdStrike in 2011 in Orange County. (CrowdStrike moved its headquarters to Sunnyvale in 2017.)

"He wanted to be the Salesforce of security," Montgomery said. "George had a vision of a cloud-centric world and the need for a cloud native cyber platform. We embraced the vision and he recruited an outstanding team and executed to perfection."

Kurtz attended Montgomery's annual Santa Monica tech conference, the Montgomery Summit, and the two kept in touch over the years until Kurtz offered Montgomery the chance to lead CrowdStrike's Series C financing. Montgomery was dealing with a family issue at the time and had to turn down getting in even earlier at a $700 million post money valuation in a round ultimately led by Google Capital. But he stayed close with Kurtz and participated in the Series D led by Accel two years later.

"We were fortunate enough at CrowdStrike to be able to pick our investors and it was important for me to work with people who added value and I trusted," said Kurtz. "Jamie has all of those. He's one of the rare gems in the venture world."

"He's been a great supporter and we've been able to make him and his limited partners a great return," Kurtz added.