In the last several years, the use of a virtual private network has surged, with growing concerns over data privacy and security, and sometimes completely different motives like people wanting to access content otherwise blocked in their regions, driving an estimated 30% of all internet consumers globally to use a virtual private network. The startup behind one of the bigger paid VPN providers, NordVPN, is announcing significant funding at a valuation that will allow it to build out both its consumer and enterprise business lines.
The company has raised $100 million in a round of funding, led by Novator, the European firm that backed Deliveroo, and others, including Burda Principal Investments and General Catalyst. The startup is valued at $1.6 billion.
The state that doesn't seem to have held back its growth is the one that was founded in 2012 and has been boot strapped for the last 10 years. The security and identity management products thatNord sells have grown to 15 million users.
In February, it announced a merger with Surfshark, a security company with roots in the same business and incubator where it was hatched, Tesonet.
Why raise now? Tom Okman, the co-CEO and co-founder with Eimantas Sabaliauskas, told TechCrunch that it made the decision to bite the funding bullet to keep up with the pace of the times, while also continuing to stay on course with its mission.
He said that the open internet was not working as intended and that they wanted to build a different internet.
The VPN industry hasn't had a smooth ride in fulfilling the aims of people who use them to evade more restrictive internet policies or to keep their browsing more private. Some that charge for their services do not handle users' data in a responsible manner and may pose security risks to their users.
Some of the criticism has touched NordVPN as well. In the last three years, its name has been mentioned in connection with Russia ordering a virtual private network to block certain sites, a breach of one of its data centers, and some of its browser extensions don't act as they appear.
Okman said that the company has been changing over the years to address the different points and to do better.
He said that they have learned their lesson and come a long way. He said that the data center breach resulted in the company changing its security and handling of data overall. The company has increased internal security teams and now goes through regular audits.
He said that the company pulled all of its business out of the country because of the fight with Russia.
Its main aim is to continue building out enterprise and consumer services as a paid offering, a business that Okman pointed out not only has seen it amass 100 patents, but a different kind of ethos to improve the product and answer to a different standard.
It was less easy to have a good idea of how it was run and what it did because of the fact that it had been quietly building and growing. Having a customer base that was mostly consumers meant less due diligence around how the product worked. More recently, though,Nord's growing enterprise business, along with this latest addition of high-profile investors and a big valuation, all give the startup not just more exposure, but potentially more oversight.
"Modern internet security requires a completely new approach to address the secular growth of risks from expanding data regulations and ever-worsening cyberthreats." It is rare to find a company that can already demonstrate such an excellent track record, brand credibility and steadfast focus on serving customers, so we are delighted to partner withNord Security to support the team as they execute their vision at scale.
All Rights Reserved © 2024
