Risk protection startup Digital Shadows scores AU$10m investment led by NAB
Digital risk protection startup Digital Shadows has announced receiving AU$10 million in funding, in an investment round led by NAB Ventures, the corporate venture capital fund of the National Australia Bank (NAB), which included investors such as London-based Octopus Ventures.
With the funding, Digital Shadows plans to scale the delivery of its SearchLight service, with an aggressive expansion plan to have its customer count upped from hundreds to thousands.
It will also be expanding into the Asia Pacific region, with a new team announced to allow the UK-headquartered company to provide “24/7 global coverage of security threats”.
“Demand for digital risk protection continues to flourish with significant growth in the Asia Pacific market. It’s clear that an investment from a regional specialist in NAB Ventures is exactly what is needed to drive further growth in this massive market and to expand the delivery of our SearchLight service to customers around the world,” Digital Shadows CEO and co-founder Alastair Paterson said.
The funding will also be used to increase SearchLight’s collection, enrichment, and mitigation capabilities, the company said.
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NAB Ventures managing director Melissa Widner and NAB chief enterprise security officer David Fairman will also be joining the Digital Shadows board as observers.
“We’re looking forward to working with Digital Shadows. It’s clear that our economy is becoming ever-more digitised, with information safety and security becoming paramount in the minds of consumers. As the platform and capabilities expand, we hope this relationship will help provide us with opportunities for future innovation,” Widner said.
“As an existing customer of Digital Shadows, we have seen the value its service provides by delivering early foresight into a range of cybersecurity threats. Digital risk protection is an emerging security category and we have already seen the benefits of adding their capabilities to our security portfolio,” Fairman added.
NAB Ventures was stood up in July 2015 to allow the bank to invest in startups that would enable it to either execute what it does better or enter into adjacent areas that drive value.
The venture capital fund was initially handed AU$50 million from NAB, with a further AU$50 million over two years invested last year. Out of that AU$100 million total, 100% is to be spent on the startups.
In the two and a half years to September 2018, NAB Ventures had looked at 1,701 companies and only sent 12 through to the investment stage.
“[Startups were] either too early or a bit too adjacent — not really in our zone — but the first thing we look for is great entrepreneurs that are passionate about solving a customer problem … people that are revolutionary, that are thinking how this world is going to be 10 times better down the path,” NAB Ventures managing director Todd Forest told ZDNet at the time.
NAB Ventures is set up within NAB and falls under Digital and Innovation, sitting alongside its innovation hub NAB Labs, as well as NAB Digital.
“That allows us to coordinate … part of our value is the investment piece, providing capital for these companies, which is really important for them to grow, however the bigger value is the strategic leverage that we can provide,” Forest said.
“In some cases, we’ll actually look at making an investment and once we make an investment, we’ll move them into NAB Labs to do an experiment or a proof-of-concept to get them their first 100 to 500 users to test it out and make sure it works well, tweak it, and make it better.
“Moving into Digital, we have the ability to scale the product … it’s not easy to do within a big corporate, but it allows us to do that effectively.”
NAB last month announced its plan to grow Australia’s technology industry, allocating AU$2 billion over five years to help startups build and grow their businesses.
The bank will use the kitty to provide Australian “tech-innovators” with loans and facilitate access to capital markets. NAB said it would also support companies with transactional banking and risk management.
“This commitment is about giving technology companies with demonstrated potential for growth the shot-in-the-arm they need to be bigger and better,” NAB Business and Private Banking chief customer officer Anthony Healy said.
“These tech-driven companies are often already profitable but need further capital and banking expertise to grow.”