IronNet, the once high-flying network security vendor founded in 2014 by a former U.S. intelligence agency official, is shutting down operations after almost two years of financial struggles.

The company, whose money problems began to emerge last year and which in early September furloughed almost all of its workers and shuttered most operations, informed the Securities and Exchange Commission that it was shedding its remaining employees and ceasing operations.

In a September 29 filing with the SEC, company officials said IronNet essentially had run out of money and will file for Chapter 7 bankruptcy, which includes a trustee being appointed to liquidate all of its assets. IronNet earlier had considered filed under Chapter 11, which would have allowed the company to reorganize and continue operating, but executives didn’t see other sources of financing on the horizon.

Stakeholders in the company will still receive a share of the money raised through the liquidation of assets through Chapter 7, but those distributions will be smaller than what would have come through Chapter 11, according to the SEC filing by IronNet President and CFO Cameron Pforr.

The assets “would have to be sold or otherwise disposed of by a Chapter 7 trustee in a distressed fashion over a short period of time rather than sold by existing management as a going concern business” under Chapter 11, Pforr wrote.

A Strong Start

IronNet was founded by Paul Alexander, a retired general and West Point graduate who once headed the U.S. Cyber Command and later the National Security Agency, and promoted as a vendor whose technology not only could help organizations protect against cyberattacks but also enable customers to share information about new cyberthreats to create a collaborative approach to cybersecurity.

Its Collective Defense Platform included the IronDefense network detection and response platform for catching known and novel threats and IronDome, an automated tool for delivering information about threats across industries. The company boasted about the use of AI techniques in the platform.

The company raised $132 million from venture capitalist firms and then pulled in another $136.7 million in 2021 when it went public through a SPAC merger with LGL Systems – a special-purpose acquisition company – and became listed on the New York Stock Exchange with a $1.2 billion valuation.

Layoffs and Restructuring

However, IronNet began to stumble the following year, when it went through two rounds of layoffs, the first cutting 17% of its workforce and months later the second slashing 90%. At the time, executives suggested that the company didn’t have enough money to keep operations going for another year and first raised the possibility of bankruptcy.

In June, the company restructured, with Alexander being replaced as CEO by Linda Zecher, who was chairman of C5 Capital, a capital venture firm and major shareholder of the company. The restructuring created a joint venture with C5 and included the company delisting from the NYSE, going private, and $15.5 million in funding dependent on IronNet hitting specific operational.

Then came September 1, when IronNet told the SEC it was furloughing most of its workers and significantly paring down operations “until such time that the Company has sufficient operating liquidity to rehire a portion of the furloughed employees and resume business operations.” A small number of employees were kept to ensure no disruption to services, though IronNet admitted that it could lose some customers due to the furlough.

C5 a day later said it was putting another $300,000 into IronNet and that it “provided a $1M note for further bridge financing of the company” to help with the continued restructuring. Hope for that ran out late last week.

Throughout its financial troubles, Alexander and other executives pointed to “headwinds” in the market for the company’s stumbles despite a network security market that is projected to continue growing, from $19.6 billion in 2022 to $40.2 billion in 2028. That said, it’s also a highly competitive space populated by the likes of Cisco, Palo Alto Networks, Check Point Software, Juniper Networks, and Fortinet.

It’s also a rapidly evolving market that includes emerging technology like zero-trust architectures, secure access service edge (SASE), and security service edge (SSE).