Startups 100-ranked cyber security firm Digital Shadows raises $26m Series C

Analysing the dark web for cyber criminals who may attack its clients, Digital Shadows has raised $49m to date and is currently eyeing Asian expansion

Cyber security firm Digital Shadows has raised $26m in a Series C funding round led by Octopus Ventures, which also included World Innovation Lab, Industry Ventures and existing backers.

In contrast to other cyber security start-ups, who analyse businesses' internal networks for hackers, Digital Shadows looks at threats on the open internet – particularly the deep and dark web.

Checking online for stolen staff details such as employees' email addresses and passwords, evidence of sensitive files being shared online, and discussions among cyber criminals on chat rooms, a whole host of  tier-1 banks and large financial organisations are currently using its services.

Twice appearing in our Startups 100 list, Digital Shadows was co-founded by Alastair Paterson and James Chappell in May 2011 – both of whom have extensive experience in the information intelligence and ‘big data’ risks business.

In February 2016, the cyber intelligence start-up raised $14m via a Series B funding round led by Trinity Ventures, Storm Ventures, TenEleven Ventures, Passion Capital and Paladin Capital Group – which it used to open offices in in San Francisco and Dallas.

Having raised over $49m to date, the Canary Wharf-based business will use the fresh injection of funds to improve its tech and expand into the Asian market.

Alastair Paterson, CEO and co-founder of Digital Shadows, said:

“This funding event is a huge milestone for Digital Shadows so we can expand our lead to offer the best digital risk management service in the industry.

“We are excited to have the support of the likes of Octopus, World Innovation and Industry Ventures as we embark on the latest phase of our development and continue to expand our geographic coverage and SearchLight service to help our customers manage their digital risk to protect their business, brand and reputation.”

Eileen Burbidge, partner at Passion Capital, said:

“It (cybersecurity) has become such an important sector and we are proud to be backing Digital Shadows once again to enable the company to go global.

“Back in 2011, we first invested in Digital Shadows at its seed stage because we recognised that its tremendously capable founding team had a unique approach to digital risk management with high growth potential.

“It has since delivered on that promise by growing clients across Europe and successfully expanding into the US market.

“Taking the proposition to Asia is the next logical step. The addressable market is tremendous – any company of any size and sector needs to protect the integrity of its data and should consider Digital Shadows.”

Worried about potential cyber threats to your small business? Read about 5 of the biggest ones you should be protecting yourself against