The news

Webroot, a software company based in Boulder, Colorado, recently secured $108 million in its first round of funding. The round, led by Technology Crossover Ventures, Accel Partners, and Mayfield, will go toward increasing sales and marketing—something the company will need to stay on the consumer and corporate radar as other companies, including Microsoft, enter the market.

Why it matters

Although analysts point to spyware as the biggest unsolved problem in digital security today, it has largely been ignored by dominant software security vendors, until recently. IDC estimates that two out of three computers today are infected with spyware, which can sometimes do more damage than dreaded viruses. Spyware collects private information, including social security and credit card numbers, and takes much longer to uninstall. A virus will typically be contained within one file, while spyware spreads itself across the operating system, poking into a variety of applications. According to Gartner, more than 25 percent of help-desk time is spent dealing with spyware.

Finding a solution to the growing problem has attracted startups and venture capitalists alike; Webroot CEO David Moll says his company was pursued by more than 100 VCs last year.

The team

CFO Mike Irwin comes to Webroot from anti-spam company Brightmail, where he previously worked with investor Technology Crossover Ventures. Mr. Moll used to cut his teeth selling lawnmowers for MTD products, a job that he says taught him how to squeeze out operational efficiencies and the importance of developing a robust sales channel. Webroot, founded in 1997, has 225 employees.

The competition

Webroot’s executives will have their work cut out for them. Their competitors include the biggest software vendor in the world, Microsoft, and the fourth-largest software vendor in the world, Symantec—each with a history of steamrolling startups that get in their way. “We certainly recognize that we’ll be going up against the biggest, baddest boys in town,” says Mr. Moll. Webroot also has tough competition from free programs, including Spybot Search and Destroy. Webroot’s software costs $29.95 for an annual subscription.

Skepticism

Two words: Microsoft and Symantec. In December, Microsoft acquired Giant Company Software, a small anti-spyware company, and within three weeks rolled out its first offering in spyware removal. Analysts say Symantec may be preparing to announce its own tools soon. Webroot and other small vendors may have shown us that the big guys have fallen asleep at the wheel, but it might not matter. Microsoft and Symantec have nailed consumer distribution and could afford to undercut Webroot’s price or bundle anti-spyware into their existing product lines.

Webroot has aggressively built out its brand and secured a solid distribution channel, gaining shelf space through partnerships with Best Buy, CompUSA, CircuitCity, Staples, and Fry’s. In January, the company announced an innovative, proprietary method for identifying spyware threats in the wild. Called Phileas, the software automates normal Internet activity, identifies spyware, and classifies it on recognition—differentiating itself from the passive methods of protection used by many other software security programs.

But these hard-won advantages could go up in smoke at the hands of its formidable competition. If Webroot can use its new-found cash to make its name synonymous with the protection it sells, it may have a chance to reap large, long-term rewards. But time is running out.