Aussie cybersecurity startup Kasada has raised US$10 million ($14.4 million) in Series B funding to fuel further global expansion, as COVID-19 causes a spike in online crime.
The round was led by specialist cybersecurity VC Ten Eleven Ventures, with managing partner Alex Doll joining Kasada’s board of directors.
Existing investors CSIRO’s Main Sequence Ventures and Reinventure — the VC arm of Westpac — also contributed.
Founded in 2015 by Sam Crowther, Kasada provides web security services, specialising in protecting sites from bots attempting user account takeovers, fraud, data scraping and other disruptive attacks.
The startup expanded to the US last year and in November closed a $7 million Series B round to double down on expansion in the States.
Since then, Crowther’s team has doubled in size, he tells SmartCompany, “which is phenomenal to think about”.
Kasada’s revenue grew 200% in the first quarter of 2020, despite the challenges posed by the COVID-19 pandemic.
And, as lockdowns continue, that growth is showing no signs of slowing.
“The acceleration of the adoption of online shopping has been really interesting,” Crowther says.
“All of a sudden, companies that we worked with that had ten or five per cent of their revenue coming through online channels, now almost have to have 100% because they can’t sell in-store,” he explains.
As people have switched to remote working and online shopping, Kasada has seen “a very substantial increase” in fraudulent activity.
Indeed, a study from McAfee released last month suggested that external attacks on enterprise-closed services increased by 630% between January and April 2020.
It wasn’t exactly unexpected, Crowther notes, but it serves to validate Kasada’s service in a post-COVID-19 environment.
“It’s helped us show customers the value of what we do,” Crowther says.
“[Businesses’] digital assets are far more valuable than they’ve ever been.”
Fundraising in a pandemic
With face-to-face meetings off the table and economies all over the world in free-fall, it’s been posited that this might not be the easiest time to raise startup capital.
But for Crowther — who is usually based in New York but has retreated to an Airbnb in the mountains — the experience was relatively smooth.
The founder had been considering raising fresh funding since the end of last year, he explains.
“We’d achieved a lot of the milestones we wanted to a bit earlier than we thought we would,” he explains.
“We were in a position where if we had more cash we could do far more things than we’d previously thought possible.”
In the first meeting with investor Ten Eleven, “there was very much a click”, he says.
The VC has booked some high-profile and multibillion-dollar security companies, he notes. So the opportunity to get these investors to the table “was an absolute no brainer”, he says.
Crowther calls the team at Ten Eleven “smart operators”, who continued to honor everything that was discussed pre-pandemic, even after the environment changed.
“We didn’t really feel the impact of COVID on our fundraising,” the founder says.
“I think that speaks volumes to the people at Ten Eleven … but I hope also to what we’re doing as a business.”
The next Aussie great
Now the money is in the bank, Crowther is doubling down on growth. He expects Kasada’s headcount to double again before the year is out, and will be focusing on building the product, and creating new functionalities.
He’s also focusing now on brand awareness.
“At the moment we’re not super well known on the global stage,” he notes.
“We really need to work on growing our brand presence here in the US and in other major markets.”
Looking a little further ahead, Crowther says the COVID-19 pandemic has proven the value of Kasada, and he’s gearing up to go big.
“I’m still very convinced that we can build a very large business and have a huge impact on the global stage,” he says.
“It’s been made very clear the impact what we do has on people and organisations,” he adds.
“With that, and with where we plan on expanding, I have no doubt we will build a very big Australian business, and be another one of the Australian success stories.
“That would be truly incredible.”