Chinese-born brothers build billion dollar fortunes in Silicon Valley with network security software firm Fortinet

Cybersecurity has unlocked riches for Ken and Michael Xie. The Chinese-born brothers are now billionaires from their stakes in Fortinet, the Silicon Valley-based network security software firm they co-founded almost two decades ago, according to the Bloomberg Billionaires Index.

Spurred by high-profile data breaches and malware attacks, cybersecurity has become a growing priority for companies.

Cloud-focused firms, including Fortinet and Palo Alto Networks, have benefited as businesses update their computer infrastructure, posing a threat to more established network security providers such as Cisco Systems and Juniper Networks. Fortinet counts most Fortune 500 companies as its customers, according to its website.

“It’s been one of the innovative companies for next-generation products as companies have looked to cyber more,” said Mandeep Singh, senior technology analyst at Bloomberg Intelligence. “It’s a fragmented market, so there’s plenty of room for a player to boost their position.”

The cybersecurity software market should grow 10 per cent a year through 2023, according to research firm MarketsandMarkets. Fortinet is outpacing that, with 2018 revenue increasing 20 per cent to US$1.8 billion from a year earlier.

Fortinet’s shares closed at US$81.22 on Wednesday, more than six times its 2009 public offering price. The stock dipped on Thursday after fourth-quarter adjusted profit missed analysts’ estimates.