Tailscale, a VPN company founded in 2019, has raised $160 million in a Series C funding round. The company’s focus on leveraging the open-source WireGuard VPN protocol has set it apart in a market largely unchanged for over 25 years. This new funding will help Tailscale expand its business, which has grown significantly in recent years, especially with the rise of AI companies needing advanced network solutions.
A Fresh Approach to VPN Technology
Avery Pennarun, CEO and co-founder of Tailscale, noticed a gap in the VPN market when he started the company. According to Pennarun, businesses, regardless of size, were frustrated with their VPNs. Yet, many were willing to allocate funds to improve their networking tools. Tailscale’s approach was simple: offer a better VPN solution that addresses these common challenges.
At the core of Tailscale’s offering is WireGuard, a modern, open-source VPN protocol known for its high security and superior performance compared to traditional VPN solutions. WireGuard provides the cryptographic foundation for secure data transmission, while Tailscale enhances it with key management and user control systems.
WireGuard’s Role and Innovation
While WireGuard became part of the Linux kernel in 2020, Tailscale opted for a user-space implementation. This allowed the company to use the same code across multiple platforms, a decision that has proven beneficial. Tailscale even optimized this user-space version to outperform the kernel-based version in certain scenarios.
Open Source and Sustainable Business Model
Tailscale is committed to open-source principles, with all of its client software available for free. The company offers a generous free plan for individuals, which includes up to three users and 100 devices. The business model focuses on monetizing enterprise users by offering commercial services with guaranteed uptime, security, and compliance features.
Tailscale Powers AI Companies
In recent years, AI companies have increasingly adopted Tailscale, highlighting its ability to facilitate network connectivity across diverse environments. Leading AI firms such as Perplexity, Mistral, Cohere, Groq, and Hugging Face rely on Tailscale for multi-cloud connectivity. AI companies often require different resources from multiple cloud providers, and Tailscale is well-suited for these complex network needs.
Looking Ahead
With the new funding, Tailscale plans to accelerate product development to meet the growing demand, particularly from the AI sector. The company intends to maintain its focus on simplicity and widespread availability, ensuring Tailscale runs seamlessly on a variety of devices.
Tailscale’s future strategy aims not only to grow in the enterprise market but also to remain accessible to individuals with its free service.
