After years of growth, funding for cybersecurity startups is starting to slow, a symptom of a broader economic downturn and an oversaturated market. According to a recent report from Pinpoint Search Group, cybersecurity funding is down 55% in the second quarter of 2023 compared to the second quarter of 2022 — a significant drop by any measure.
Meanwhile, the cybersecurity market continues to outperform the broader technology market. The same Pinpoint memo found that the cybersecurity industry will grow by 12.5% year-over-year in the first quarter of 2023.
As a case in point, network technologyThe UK-based cybercrime detection company announced today that it has raised $100 million in a funding round led by Spectrum Equity, a Boston- and San Francisco-based private equity investor focused on services businesses. The financing, Netcraft’s first since its founding in 1995, will be used to expand the company’s service offerings, talent acquisition and customer success efforts.
“New types of cybercrime continue to emerge and become more sophisticated,” Netcraft’s newly appointed CEO Ryan Woodley told TechCrunch via email. Our mission to detect and combat cybercrime at scale and create a safer online experience for all Internet users.”
Launched in 1995 by Mike Prettejohn, Netcraft offers a range of subscription-based cybercrime detection, disruption and removal services. The company uses artificial intelligence to detect, verify and combat online threats such as brand infringement, phishing, executive impersonation and fake e-commerce sites.
For example, Woodley said Netcraft uses AI to target bad actors “at scale,” particularly perpetrators of investment, cryptocurrency, and remittance scams, and gathers information that can then be used to help fight those actors. Netcraft customers can access reports through the company’s portal or an API integrated with their internal systems.
“Netcraft uses machine learning to train our classification models to identify attack types,” Woodley explained. “The composition and sophistication of attack methods employed by bad actors changes over time, and machine learning helps us employ continuously optimized models to accurately detect these attacks in real time and avoid false positives.”
In addition to providing automated services, Netcraft maintains a “threat intelligence feed” covering cybercrime against major institutions and conducts a web survey that maintains data on approximately 1 billion websites. Data from feedback and surveys allows Netcraft to gain insight into historical trends and correlate them with real-time data collected from a range of third-party and first-party sources, Woodley said.
“Through extensive automation backed by the human insight and technical expertise accumulated over decades of work in the field, Netcraft is able to achieve a scale and reach that is difficult for internal information security teams to replicate,” he added. “There simply isn’t enough in one day.” time to effectively manage the number of existing information security threats, let alone stay ahead of emerging ones.”
Is this all marketing hyperbole? Maybe so — at least to some extent. But Woodley isn’t wrong about the growing challenge of mitigating cybersecurity threats.
Phishing attacks alone will increase by 48% in the first half of 2022, according to to Security Intelligence.At the current pace, the damage caused by cyberattacks will quantity By 2025, it will reach about $10.5 trillion per year—a 300% increase from 2015 levels.
Perhaps spurred by this, customers are embracing Netcraft, Woodley claims. The company says it serves hundreds of brands, including 10 of the 20 largest European banks, three of the world’s four largest corporations and eight of the world’s largest governments.
Parag Khandelwal, managing director of the private equity firm, said the size of the client base was one of the factors in Spectrum Equity’s decision to invest in Netcraft.
“Netcraft is the most impressive cybersecurity business you’ve never heard of. That’s what gets us excited about the company,” Kandelvar said in an emailed statement. “They’ve been able to fly under the radar and build truly unique products to solve hard problems. They have advanced automated solutions that mitigate millions of attacks a year. The level of effectiveness, speed, and scale is the best we’ve ever known in the industry.” OK, that’s true for hundreds of long-term blue-chip clients.”
To better accommodate its growing customer base, Netcraft plans to increase the size of its team of more than 100 people by 30 percent this year, Woodley said.
“As we have noted, cybercrime continues to grow in scale and sophistication, and the problem is not going away,” he continued. “Netcraft is a mission-critical component of a cyber defense strategy.”