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CounterCraft has secured $5m in funding //17.06.20

CounterCraft founders

LORCA member CounterCraft has secured $5m in its latest funding round to fuel the next stage of its growth.

The round was led by Adara Ventures, which was joined by new investors eCAPITAL and The Red Eléctrica Group. Investors that have previously backed the company such as Evolution Equity, ORZA and Wayra also took part.

The startup’s mission is to enable every organisation to defend itself proactively from cyber threats. It offers threat intelligence as a service and has a cyber deception platform with multiple use cases, including securing remote workers, spear phishing response and detecting lateral movements by threat actors.

Commenting on the decision to back CounterCraft, Dirk Seewald, partner at eCAPITAL said: “Cyber threat deception solutions promise to provide the highly sought-after efficiency and effectiveness in threat detection programs”. By luring intruders into a digital twin of your companies’ IT infrastructure, the quality of intelligence gathered increases tremendously.”

Alberto Gomez, managing partner at Adara Ventures added: “We continue to be inspired by the combination of engineering ability and vision that CounterCraft has shown in defining a new category of defensive tool that responds to the current threat landscape. Nothing else we have seen effectively uses a Know-Your-Attacker stance to turn the tables on threat actors.”

CounterCraft is about to graduate from our third accelerator programme and will be sharing more about its growth journey at our graduation event on 25 June.

In the meantime, we caught up with Dan Brett, the company’s chief security officer and co-founder, to learn more…

Congrats on the raise Dan! Was it more challenging to complete a raise during lockdown?

It was a bit of a nightmare to be perfectly honest. Overnight the risk assumptions that investors had made about the future of all types of markets went right out of the window. This meant that effectively valuing investment rounds was challenging and the valuations were changing on a daily basis. However, once we came through the initial weeks of lockdown, it became easier.

What also helped was that we have cultivated relationships with investors since our first round by providing them with regular updates. Leading up to this round we made a concerted effort to get back in contact with all the investors that we had met over the years.

We built trust with them and our new investors by being as transparent as possible about the risks and challenges, as well as the many opportunities that come with investing in an emerging market.

“It was a bit of a nightmare to be perfectly honest

How did you know now was the right time to secure more funding?

We closed 2019 with very successful product deployments for top customers and partners and we’ve experienced steady growth following our expansion across Europe and in the UK since our last funding round.

So we knew it was the right time to scale further and respond to increased market demand. And to do that we needed additional investment. You always aim to raise as late as possible to allow more time to increase the value of the company.

Do you think cyber is more insulated than other sectors right now?

I believe so. Working practices have gone remote and many companies are relying on security systems such as VPNs to provide a secure working environment. Teleconferencing has exploded. Digital channels for shopping and fulfilment are more important than ever. And all this means that the associated risks of connectivity are higher than ever.

And have you noticed more VC interest in cyber this time from both specialists and non-specialists?

We’ve counted on specialist cyber investors from the start. This has been incredibly useful as they know the market and can provide real value. Both Adara Ventures and Evolution Equity Partners are seasoned investors in cyber firms. In this round they have been joined by eCAPITAL from Germany, that has a cyber specialism too.

That being said, during the raise we saw a lot more interest in cyber from more generalist funds.

“our involvement with LORCA has been a fantastic catalyst for expansion

And how has being part of LORCA enabled your growth journey so far?

Our involvement with LORCA has been a fantastic catalyst for expansion and we’ve learned a great deal along the way. It’s opened many doors and provided valuable opportunities to pitch to customers and investors in our target markets. On top of this, we’ll sustain the connections we’ve made with other cohort members in the long term.