Aussie cyber security startup Kasada has completed a $7 million funding round, as it doubles down on its growth in the US.
The round was led by Main Sequence Ventures. Existing Aussie investors Reinventure and Our Innovation Fund also contributed, along with new backer In-Q-Tel, which this week announced it has also invested in Aussie artificial intelligence startup Advanced Navigation.
Founded in 2015 by Sam Crowther, Kasada provides web security services, specifically protecting sites from bots attempting user account takeovers, fraud, data scraping and other disruptive attacks.
In the past six months, Crowther himself has relocated to New York, to set up the startup’s US headquarters, and worked on building up the sales and marketing team.
While he doesn’t disclose concrete figures, preferring to wait until the year is out, he points to the wild growth achieved last year.
“We’ve probably doubled again since then,” he tells StartupSmart.
Playing it by ear
This funding is mostly pegged for managing Kasada’s expansion in the US, and will largely go towards hiring.
Firstly, Crowther wants to get the right customer support and sales infrastructure in place.
But he will also invest in the engineering team, “so we can make sure the product, and the business, is actually technically ready for when that huge wave continues”.
And it’s a wave the founder expects to just keep growing.
In 12 months’ time, “we would like to have tripled our revenue from where it is today”, he says.
He’s also considering expanding into new markets, starting with the UK, where Kasada already has customers. But, a true Aussie, Crowther is playing it by ear for now.
“It will just be a matter of how well we execute in the US, and then opportunistically, if more big accounts come, that will warrant an investment in that market.”
And beyond that, he’s keeping his options open. Kasada recently hired chief revenue officer Pascal Podvin, who saw his previous startup ThreatMetrix through a significant growth period and ultimately to a billion-dollar exit.
But, the latter is not what Crowther has in mind.
“There’s a big business to build here, he says.
“I think an exit now would be very premature in terms of the opportunity we have in front of us. The market is absolutely immense and it somehow keeps growing.
“We have many years left in us, building a very sustainable and longer-term business.”
Keeping existing investors on board is “always an amazing sign” for the business, Crowther says.
And, their continued support allows the founder to keep one foot in his home market.
“We want to make sure we keep strong roots in Aus.”
At the same time, in this round, the startup has got its first US investor on board in In-Q-Tel, and that’s a big deal too.
“It shows that this group believes that an Australian company like us is in a position to pull it off.”
That offers a nice boost to the confidence, he says.
“These guys see a lot more than we do in our bubble of Australia,” he explains.
“While Australian VCs have amazing visibility as to what’s happening locally, it may be a bit difficult for them to see the full landscape.”
It’s a validation, Crowther says. And one that is only amplified by the VC in question. In-Q-Tel is a tech-focused fund mandated to deliver national security solutions to 10 US government agencies, including the CIA.
“They only want to back technologies that work, and we’re the only one in this space … that they’ve bet on,” he explains.
“Coming up against stone walls”
When it comes to achieving success in the US, Crowther stresses that for Kasada, “the most critical thing was that we had success in Australia first … so it was referenceable.”
However, he also warns startups they “can’t underestimate the importance of a founder moving”.
Initially, the team tried to make the move work with Crowther remaining in Australia.
“It was just coming up against stone walls,” he says.
The moment he relocated, everything changed, largely because he was able to work with the team and meet potential customers face-to-face.
“The early customers in any region are buying into the story as much as they are the business,” Crowther says.
“The founders are really the only people who can sell that,” he adds.
“They’re the people who truly believe it, and who are building the whole story, and everything around that.”