In the last 12 months, a staggering 32% of UK businesses experienced a cyber security attack. This was the alarming statistic revealed by the Department for Digital, Culture, Media and Sport in its 2019 Cyber Security Breaches Survey. Whilst these cyber attacks are costing almost a third of UK businesses significant costs to repair their infringed systems, they are also spurring greater demand for digital security measures to combat these threats. In this post we explore this growing sector and the ambitious digital security businesses that are demanding investor attention.
Securing more investment
There is a clear upward trend in the amount of capital raised by the UK’s 437 ambitious digital security companies over the last eight years. This differs when looking at the funds raised by all our tracked companies across all sectors, with the total number of fundraisings and value raised declining since 2017. The increasing fundraising for digital security companies means that these companies can spend more on R&D and innovation, which will aid their efforts in growth. The rising trend also indicates that digital security is a growing industry, with these companies continuing to capture investor attention. There has been a particularly large increase in funds raised for the 437 digital security companies in the last two years especially, with total value of fundraisings increasing from £289 million in 2018 to £401 million in 2019 so far.
Ambitious companies to note
Recent years have already seen a few digital security companies emerge as highly successful. For instance, as of July 2019, world-leading cyber security company Darktrace was valued at $1.2 billion, joining the UK’s growing herd of startup unicorns. 2013 startup Tessian has also developed the world’s first Human Layer Security platform to detect phishing, unauthorised and misdirected emails. Tessian has now raised £44.4 million and continues to grow in pursuing its mission to secure all human-digital interactions within the enterprise. Here’s a few emerging digital security companies that are still in the seed stage, hoping to follow in Darktrace and Tessian’s footsteps.
Hazy is an AI spin-out from UCL’s Centre for Computation, Mathematics and Physics and was founded in June 2017. Hazy is developing synthetic data software which artificially creates information whilst still maintaining the properties of real data, enabling the data to be anonymous and securely shared. In just over two years, it has raised £2.45 million, including a £737,000 investment with participation from Microsoft venture fund M12 and Notion Capital. This cash injection came from winning M12’s Innovate AI award – a global competition launched by M12 to award capital to high-potential AI startups. Hazy was also featured in ‘The Startups 100 2019’ high-growth list which recognises the UK’s most exciting ventures.
RazorSecure was established in late 2014 and provides cyber protection for transportation services by providing continuous and immediate detection of data breaches. Using machine-learning to detect and respond to data attacks, RazorSecure has partnered with notable organisations such as South Western Railway, Icomera and Arriva. RazorSecure was also amongst 11 companies chosen by industry-leaders for their growth potential, to attend LORCA’S (London Office for Rapid Cybersecurity Advancement) 2019 accelerator programme. Additionally it has also been featured in ‘Startups 100 2018’ high-growth list.
DynaRisk assesses a business or individual’s online risk by creating a Personal Security Score. This unique Score – the first of its kind – forms the basis of selective digital security protection, where DynaRisk produces a tailored list of actions to improve its users’ entire digital footprint. Since being founded in May 2014, DynaRisk has raised £1.79 million and is valued at £5.2 million as of its latest fundraising in September 2018. DynaRisk was also selected to join Tech Nation Cyber’s inaugural scale-up programme, being one of only 20 cyber security companies to be selected. With this six month program, which started in April 2019 and ending shortly, DynaRisk looks poised to soon make its impact in the digital security space.