How Tailscale is building the new internet

Cofounder and CEO Avery Pennarun didn’t set out to be a tech entrepreneur; what he really likes is coding. It’s something of an understatement from someone who sold his college startup (Net Integration Technologies, or Nitix, a network server appliance for small businesses) to IBM, worked as a senior staff software engineer for Google for nearly eight years, and is now running a networking company that underpins much of the AI industry. 

With Tailscale, he’s building not just a better virtual private network (VPN), but a new internet.

Making the easy things easy

The idea for Tailscale emerged from a contrarian observation: Not everything needs to operate at internet scale. 

“Too many people are assuming that everything they build is going to scale to a billion users and a billion compute nodes. Almost nobody actually has that problem.” 

Even at companies that do, like Google, most of the work is on a smaller scale: an internal dashboard, an HR tool, a database instance, a build system. But basic connectivity and security tasks for those systems still take most of the time and energy to build.

That struck Pennarun and his cofounders David Carney and David Crawshaw — former colleagues from previous startups and Google — as the place to start building. 

They saw teams spending 90% of their time just dealing with connectivity and security when building an internal tool, and only 10% of their time actually building the tool itself. 

“Nobody actually wants to do networking except a small group of people that we call network engineers,” says Pennarun. “For everybody else, the network is an obstacle that’s stopping their job from getting done.”

So in 2019, they set out to remove the obstacle, and “make easy things easy,” says Pennarun. That principle became Tailscale’s north star.

Building for developers

The team built a peer-to-peer, zero-configuration VPN that could be launched by anyone, installed on any device, and work from anywhere, without the long setup times and complexity of traditional VPNs. It was something that let users create secure, encrypted, and authenticated networks between any number of devices, without needing centralized infrastructure or complex firewall management.

Released in 2020, it was well-timed. COVID-19 meant employees were looking for ways to connect remotely and securely to their workspaces. But what made Tailscale stick was that it was built for developers, not security teams.

“Those are the teams that have really concrete value they need to deliver,” says Pennarun. “It’s like, ‘I need this right now in order to solve this problem right now’. And then Tailscale is also a security product, but it has this grounding in reality, which a lot of security products don’t.”

Developers were using it at home, bringing it into work to solve some engineering problem, and then quietly rolling it out across the team — before getting the attention of the security team.

Solving security by accident

“The engineers were just trying to solve their problems, and ended up solving them in a more secure way, kind of by accident,” says Pennarun. “And then CISOs get excited about it, because now the default way of doing things is better than what it used to be.”

Tailscale didn’t market itself as a security product, but it was one. Security is baked in. The VPN is identity-centric, end-to-end encrypted, doesn’t trust the physical network — the core tenets of zero-trust networking.

“Often we’ll end up doing the presentation halfway through the purchasing process,” says Pennarun. “The security team gets involved, and they listen to us for half an hour, and then someone’s like, ‘Wait a minute, is this zero-trust networking?’ And we’re like, ‘Yeah, yeah, it is.’”

Traditionally, companies would buy a VPN and a firewall as separate products. Tailscale merges those two things together, solving connectivity and security at the same time.

This also helps security teams flip their image from gatekeepers to enablers. 

“Security teams kind of suffer from a reputation issue, which is that their job is to prevent your work from getting done,” says Pennarun. “Tailscale changes the formula, where the default becomes the secure thing to do.”

“When security teams approve of or recommend Tailscale, they can be the good guys instead of the bad guys.”

Building the new internet

What makes Tailscale different isn’t just how it works, but where it works. Instead of sitting on top of layer seven of the networking stack (application), it operates much lower down the stack, at layer three (network). This allows it to simplify rather than add complexity.

“Nobody nowadays knows how to build something further down in the stack because they’ve all been trained to just add more layers on top to create the system that they want,” says Pennarun. “When you try to solve a problem by adding more layers, you can do it, but the system gets bigger and bigger and more complex.” 

Tailscale embeds the security technology that’s usually applied much higher up the stack — cryptography, identity, firewall traversal — way down at the network layer, minimizing the need for the extra layers and complexity on top.

As one user told Pennarun, “Tailscale makes the internet feel like what you thought the internet would feel like, before you learned how the internet works.” That’s the ambition: a simpler, more secure internet, built on a better foundation.

“We have every company size, from two employees to tens of thousands of employees using Tailscale,” says Pennarun. 

“You can have this one thing and roll it out to everybody, and it works equally well for everybody. And that’s because the metaphor is really the internet, right? We are all on the internet.”

“Tailscale is what I call the new internet, where we finally fix some of the problems with the old internet without breaking how the old internet works.”

It’s a vision that Insight Partners backed early, co-leading the company’s $100M Series B in 2022. 

“One of the things I liked about Insight is, first of all, they’re extremely quantitatively data-oriented, while still understanding that we were, at the time, very much a startup-stage company. So they were expecting us to grow into a growth-stage company, which we have now. But they were also willing to help us all the way along,” says Pennarun. 

“I wanted an investor that understood that transition and also the phase that comes after that.”

Speaking of the partnership at the time, Insight Managing Director Rebecca Liu-Doyle said: “Tailscale is ringing in a new paradigm of secure networking — one that is centered around intuitive design and user delight. Tailscale has captured the minds, and more importantly, the hearts, of developers within organizations of all sizes.”

“We accidentally won the entire AI networking market”

By March 2024, the company had 5,000 paying business customers. Ten months later, it had more than doubled its customer base. In January 2025, Tailscale surpassed 10,000 business customers — ranging from small firms to Fortune 500 companies — and over 500,000 weekly active users, with a total active user base in the millions.

A big part of that recent growth has been driven by AI startups, like Cohere, Mistral, Hugging Face, Groq, and Perplexity.

“Every AI company has what we call a multi-cloud problem,” explains Pennarun. “They have a GPU in one place where they got a good price for it, and they have everything else, probably in AWS, where the highest quality stuff is. And now they need to connect these two things together.”

In other words, every AI company has a big networking problem because they have to transfer vast amounts of data between many machines across multiple cloud providers. And, given the amount of personal data they process, they also face access control, compliance, cryptography, identity, and privacy concerns. It’s the ideal use case for Tailscale.

And thanks to the tight-knit nature of the community, the word spread fast. “We had accidentally won the entire AI market for networking software,” jokes Pennarun.

Solving a billion-dollar problem

Looking ahead, Pennarun believes that AI will further collapse connectivity and security. “In the next three to five years in security, we’re going to see a little bit of consolidation on how people connect one thing to another,” he predicts. 

That might be a self-serving answer, he admits, “but I think it’s going to be precipitated by this AI movement where suddenly everybody needs to be able to plug their AI into the other AI, and the other one, and the other one — and connect them all together.” His vision is to simply have one solution that “works equally well for everybody.”

Since each of those AIs will need access to internal, potentially sensitive data, “there needs to be standards for how this stuff works,” he adds. “MCP [Model Context Protocol] is the first step in that standard. But MCP has this limitation that if your thing is behind a firewall, it can’t connect to it.”

Tailscale might not have set out to solve the billion-node problem, but it’s well on its way.

Note: Insight Partners has invested in Tailscale.