The rise of Tailscale from WireGuard experiment to market leader

The WireGuard Foundation

Avery Pennarun, David Crawshaw, David Carney, and Brad Fitzpatrick founded Tailscale in 2019. The software uses the WireGuard protocol to establish encrypted, peer-to-peer connections between devices. While WireGuard provides the data plane, Tailscale manages the control plane by distributing public keys through a coordination server. Tailscale manages the coordination server that makes this VPN connection possible by distributing the public keys to all your devices in your Tailscale network so that they can securely communicate with each other. This architecture allows devices to communicate as if they sit on the same local area network. Early users utilized Tailscale for simple tasks like connecting a Raspberry Pi to a phone. The platform provides MagicDNS for human-readable device names and Funnel for secure sharing to the public internet. Users can also use Taildrop to transfer files between devices. The software allows users to run exit nodes on devices like Apple TV or Android phones. Pennarun previously worked at Google on Google Wallet and Google Fiber. WireGuard’s code remains small at roughly 4,000 lines, compared to the 100,000 lines in OpenVPN.

Growth and enterprise demand

Tailscale secured $275 million in total funding through several rounds. The company raised $3 million in its April 2020 seed round, $12 million in November 2020, $100 million in May 2022, and $160 million in April 2025. The Series B in May 2022 reached $100 million and was led by CRV and Insight Partners. The Series C round, led by Accel, gave the company a $1.5 billion valuation. This capital allowed the team to expand engineering and product development. The company also serves large organizations like Hugging Face, Mozilla, Mercari, and Instacart. Many companies replace brittle, hub-and-spoke VPNs with Tailscale to reduce support tickets and management complexity. You know how manual key rotation kills productivity, so Tailscale automates identity via SSO. As of April 2025, the company reported $19 million in revenue, which implies a 78.9x revenue multiple. The company serves over 20,000 businesses and 10,000 paying tailnets. Tailscale has grown to five million registered users by early 2026. The company employs 150 people. Investors include Heavybit, Uncork Capital, Insight Partners, and angels like George Kurtz and Anthony Casalena. The Personal plan allows up to 6 users for free and remains suitable for non-commercial use.

Market dominance and technical specs

Tailscale holds 0.12% of the SaaS market share as of September 2026, while OpenVPN holds 0.06%. This adoption lead exists despite Tailscale ranking lower in spend than OpenVPN. Traditional IPsec concentrators fell into the obsolete track in 2025, while zero-trust mesh networking reached plateau status. Tailscale solves the NAT traversal problem that stops raw WireGuard from working in many environments. When direct connectivity fails, the system uses DERP relays in roughly 200 locations. The 5% of connections that fall back to relayed mode suffer from lower throughput and higher latency. Phoronix performance benchmarks show WireGuard reaches 7.5 to 8.0 Gbps of single-stream TCP throughput on AMD EPYC 9654 hardware, while IPsec via strongSwan reached 6.8 Gbps. WireGuard kernel-mode reaches 8 Gbps of throughput, whereas OpenVPN caps at 1.1 Gbps on the same hardware. Tailscale uses RFC 6588 carrier-grade NAT space for client addresses to reduce network interference. Tailscale uses STUN and UPnP to establish direct connections. The software provides support for Kubernetes operators and Docker images. Does the automation of security always remove the need for manual oversight?