Cybersecurity continues to be a major area of investment among businesses, and today, startups building solutions for small businesses are announcing funding rounds to meet that demand. CyberSmart — UK start-up building an all-in-one platform to bring cybersecurity technology to small businesses, with £12.75m ($15.4m) Series B cyber insurance in case of problems closed.
CyberSmart currently has 4,000 customers in the UK, 1,800 of whom are also covered by the company’s insurance. This is the tip of the iceberg in a market where he has 5.5 million small and medium businesses (SMBs) overall. and the CEO said there is a lot of interest there and it is important to meet that demand right now, so the plan is to use the funds to continue developing the product and potentially make several acquisitions. and expanding channel partners and customers, not only in its home market, but also in markets further afield in Europe, Australia and New Zealand.
The funding is led by Oxx, a European VC focused on growth rounds for SaaS startups, with strategic and other interesting backers. They include British Patient Capital (a commercial subsidiary of the British Government’s British Business Bank), Legal & General Capital (partnered with insurance giants), and Solano Partners. Previous backers IQ Capital, Eos Venture Partners, Winton Ventures, and Seedcamp are also participating. The company has previously raised his £8million and has not disclosed a valuation for this round, but Akhtar said it is above the asking price.
Investor and customer interest in companies like CyberSmart speaks to the larger changes we are seeing in the market. Small businesses have often been overlooked when it comes to cybersecurity. There were several reasons for that. Criminals usually look at their biggest targets as their biggest bounties, and small businesses are not known to spend a lot of money on all kinds of IT. For these reasons, companies are building some of the most interesting cybersecurity technologies. We didn’t focus on them as target use cases or customers.
It has changed a lot over time. According to a 2019 study by the Global Cyber Alliance, not only are cybercrime incidents continuing to rise (a 38% increase globally by 2022, Checkpoint Research estimates), but SMBs are the most likely victims of these attacks. are the main targets of , accounting for 58% of them.
As a result, the SMB segment is increasingly targeted by those building cybersecurity solutions. These include those that mix security and insurance propositions, such as Cowbell and Guardz, and those that focus on technology, particularly security incident types, such as ActZero in particular, and ransomware in particular. is also included.
Oxx partner Phil Edmondson-Jones said in a statement: “We have been searching for the right business model for a long time to make a big difference in this important and huge market. CyberSmart’s category leading SME security products. Combined with our unique ability to collect data, it propels your business to become the core of your cyber protection and insurance infrastructure. We are pleased to support CyberSmart and its excellent team to accelerate market adoption and rapidly expand internationally. ‘ He’s also joining the board in this round.
Many activities may be new, but CyberSmart itself is not. The company was actually founded six years before him and is something of a pioneer when it comes to using cybersecurity technology to identify and target SMBs. The startup was initially incubated in an accelerator run by his GCHQ, the equivalent of the UK’s NSA. Akhtar built the business out of his own experience after working in the cybersecurity field for more than a decade with other companies.
“We found that small business security was breached,” he said. “Many of them were unaware of cyber risk and simply didn’t have the tools or resources to tackle it. We approached the issue from that perspective.”
The product is aimed squarely at the ‘S’ end of SMBs (or SMEs as they are commonly called in the UK), with an average customer size of between 10 and 50 employees, and much larger There are no plans to expand into the enterprise, mid-market. , or anything else. And its primary distribution channels target markets that CyberSmart identifies and understands. We sell primarily through channel partners. A channel partner consults small businesses about their overall IT needs, and as part of that he sells IT hardware and software packages. CyberSmart is the security portion of its offering.
“As cyberattacks become more sophisticated, so must the technology needed to protect against them. It’s a difficult challenge to tackle for the sake of health,” added Catherine Luis La Torre, CEO of British Patient Capital. “CyberSmart was created to address this problem, providing not only affordable and easy-to-use cyber protection, but also training, certification and insurance. Growing such a dynamic and ambitious business I am delighted to be able to support the
The security part of it comes in the form of its flagship product, Active Protect. Akhtar describes it as a “baseline” security tool that IT professionals can install and use without having to integrate or manage it. Active Protect is distributed to staff via a link and can be downloaded to any device used on your company’s network. Once installed, it offers continuous monitoring, proactive information and advice, and alerts people when they spot any kind of suspicious activity. Get trained to be more aware and vigilant of typical attack vectors (for example, email phishing is one of the most common that comes down to humans making healthy phone calls). It describes its purpose as the “most common” vulnerability.
In addition to this, CyberSmart has partnered with Aviva and Superscript to build insurance products. It comes bundled with Active Protect, but if users have followed all instructions to protect their devices, address security issues when identified, and receive training when recommended. only effective as a policy.
There are two purposes here. Akhtar believes that many SMBs may not normally have cyber insurance due to high premiums. So offering something as a free add-on will encourage more people to sign up for that security product. In addition to cost, however, Akhtar believes that many cyber insurance policies aimed at the SMB market are selling poorly due to the relatively stringent parameters that must be met for support. Security makes the most sense to tie him directly to how policies are managed. (These may be two big reasons he sees so many other companies bundling his cybersecurity solutions with insurance.)
Notably, Akhtar told me that since the company launched its insurance product over a year ago, not a single case has been filed against it.
However, there are some gaps in what CyberSmart offers to the market. For example, if the most common vulnerabilities have been addressed, isn’t it only a matter of time before hackers start tackling SMB with increasingly sophisticated approaches? If it’s all about providing guidance to a team of human employees, is there room to complement it with more automated approaches and technology that can deal with more sophisticated attacks? It’s an area where we’re likely to build a lot of technology or introduce additional features through acquisitions.
On the acquisition side, Akhtar said his own fundraising trip has really revealed the current state of the market. “I’ve spoken to hundreds of VCs over the course of nine months,” he told me (and if asked to emoji his expression in that moment, it’s a slightly anxious smile. and will be one of the sweatball faces) running sideways: 😅).
In the case of Cybersmart, it was also because he and his team were selective, looking for a partner who could help them grow their business, not just their bank account. It highlights how difficult it is right now to complete a round of , and a promising tech who is running out of runway or getting a bad funding offer could be willing to sell instead. . Low prices, working with partners to grow something together.
There are also plans to expand into the US with a larger Series C in the future, Akhtar said.
