Tailscale, a networking software company, has raised US$160 million in its series C funding round.

The round was led by Accel, with participation from CRV, Insight Partners, Heavybit, Uncork Capital, and angel investors George Kurtz and Anthony Casalena.

Founded in 2019, Tailscale offers a platform that simplifies secure network connectivity.

The company plans to use the new funds to expand its engineering and product teams to meet increasing demand in sectors such as AI and enterprise networks.

🔗 Source: Tailscale

🧠 Food for thought

1️⃣ Venture capital evolves toward fewer, larger deals with higher standards

Tailscale’s $160 million Series C exemplifies the ongoing shift in venture funding toward concentrated “supergiant” rounds for proven performers.

This follows broader industry trends where the number of funded startups has declined while investment amounts have increased significantly, with total VC funding reaching $254 billion in 2018 1.

Investor standards have tightened considerably over the past decade, with 70% of Series A startups now generating revenue compared to just 15% in 2010, showing how the bar for funding has risen 1.

Tailscale’s journey from founding in 2019 to unicorn status ($1.5 billion valuation) in 2024 demonstrates remarkable speed and reflects the industry’s shift toward backing companies with demonstrated traction rather than just promising concepts.

The company’s reported doubling of annual recurring revenue and base of 10,000 corporate customers suggests they’ve met the higher performance benchmarks investors now require 2.

2️⃣ Strategic investors signal industry direction and validation

The participation of CrowdStrike CEO George Kurtz in multiple Tailscale funding rounds highlights how security-focused companies view networking innovation as strategically valuable.

This follows the growing trend of corporate venture capital influence, which now participates in 15-20% of all venture deals and often leads to valuations 2.5 times higher than startups without corporate backing 3, 1.

Tailscale’s ability to attract specialized investors who understand the intersection of networking, security, and identity validates their technical approach and market positioning.