Tailscale is a privately held, Toronto-founded networking company that turns WireGuard into a zero-trust mesh VPN. Founded in 2019 by Avery Pennarun, David Crawshaw and David Carney, and joined by Brad Fitzpatrick in 2020, it was nearing 40,000 paying business customers with about 300 employees by July 2026.
How Tailscale works
Each device runs a Tailscale client. A coordination service handles login through the customer's identity provider, distributes WireGuard keys and pushes access rules. Devices then build encrypted tunnels directly to each other. When NAT or firewalls block a direct path, traffic goes through Tailscale's DERP relays, which forward packets they cannot decrypt. Features include MagicDNS hostnames, Tailscale SSH, subnet routers, exit nodes, and Serve and Funnel for sharing services.
How Tailscale makes money
Tailscale is freemium. Individuals can use it free, and businesses pay per user, with enterprise contracts for larger customers and add-ons such as Mullvad exit nodes. It revised pricing in April 2026 to make plans simpler and more predictable. Revenue is not disclosed, but CEO Avery Pennarun says sales have doubled every year since launch and are on track to double in 2026.
Funding, valuation and ownership
- 2020: $3 million seed; $12 million Series A led by Accel
- 2022: $100 million Series B led by CRV and Insight Partners (about $780 million valuation)
- 2025: $160 million Series C led by Accel, with CRV, Insight Partners, Heavybit and Uncork Capital (about $1.5 billion valuation, per Bloomberg)
Total funding is roughly $275 million. Tailscale is owned by its founders, employees and these investors.
Growth in 2026
Paying business customers doubled from November 2025 to July 2026, reaching nearly 40,000, and Tailscale reported two million monthly active users. Pennarun credits AI demand, including AI agents that recommend and deploy Tailscale. Customers include Microsoft, Nvidia, SAP, Instacart, Duolingo, Mistral, Cohere and Telus. In March 2026 Border0 joined Tailscale to add audited access to databases and Kubernetes, and in July Mike Shaver, formerly of Mozilla, Facebook and Fastly, became VP of Engineering.
Competitors
Tailscale competes with Cloudflare One, Zscaler Private Access, Palo Alto Networks Prisma Access, Cisco and Fortinet VPNs, Twingate and ZeroTier, plus open-source NetBird and Headscale. Its pitch is simpler setup and direct peer-to-peer connections rather than routing everything through a vendor cloud.
