Best Week, Worst Week: ZeroFox continues climb; Baltimore loses iconic brand in Legg Mason

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Good news this week has ZeroFox continuing its climb as one of Baltimore’s rising companies. The bad news? Baltimore is losing one of its most iconic brands in Legg Mason.

Business writer Tim Curtis reported Thursday that Baltimore cybersecurity firm ZeroFox announced the completion of a $74 million funding round and CEO James C. Foster said an IPO is likely in the company’s future.

The $74 million round was led by Intel Capital and included investments from existing investors such as NEA, Highland Capital Partners, Redline Capital Management, Hercules Capital and Core Capital. The firm had previously raised more than $80 million across several rounds, including a $40 million round in 2017.

As the firm has grown, it has used investments to grow geographically. Now the company hopes to use Intel’s investment to grow globally with customers in 50 countries and offices on four continents and plans to hit 500 employees next year.

Even as it expands, ZeroFox CEO James C. Foster plans to stay in Maryland, showcasing how Baltimore can be a good alternative for firms and top tech talent in the country to relocate.

As ZeroFox continues to solidify its roots in Baltimore, Legg Mason’s run as a Maryland company ended this week as the money manager was acquired by a California firm for $4.5 billion.

After months of meetings, Legg Mason chairman and CEO Joseph Sullivan announced that a sale to Franklin Resources has been approved by both company’s boards. Franklin is buying Legg Mason for $4.5 billion, a sale that essentially means the end of a company whose roots in Baltimore go back to 1899 and whose presence as a philanthropist and community leader – symbolized by the Harbor East glass tower bearing its name – is prominent and visible.

The deal is expected to close no later than 2020’s third quarter. It still needs approval from Legg Mason shareholders.

Sullivan said it’s unclear how many Legg Mason employees will remain in Baltimore or even what his own future with the company will be, but he acknowledged the company would be hit with some job losses among the 250-plus employees based in Baltimore.

The sale comes at a time of increasing turmoil in the industry as a handful of large index fund managers increasingly dominate the market. Many traditional asset management companies, like Legg Mason, have struggled.

A number of asset managers and brokerage firms have resorted to mergers. In November, Charles Schwab bought TD Ameritrade. In previous years, Invesco bought OppenheimerFunds, and Janus Henderson Group and Standard Life Aberdeen were formed in mergers in 2017.

The market responded favorably to the news. Shares of Legg Mason closed up more than 24% Tuesday, while Franklin Resources’ stock went up more than 7%.