Swedish Cybersecurity Firm Raises $23M To Enhance ‘Ethical Hacker’ Network

Sweden-based Detectify, a crowd-based online security company that incentivizes “elite hackers” to help developers stay abreast of security issues, has raised €21 million in a funding round, according to a report.

The funding round was led by London-based VC firm Balderton Capital, with participation by Paua Ventures, Insight Partners and Inventure. The company said it will use the capital to hire top talent and continue its mission of reducing internet security issues.

Detectify provides a security tool that scans websites for weaknesses, but it says its differentiating factor is the involvement of what it calls an “ethical hacker network.”

Security researchers submit weaknesses that are then stored in the company’s scanner for future use in security testing. Those researchers also get paid every time the scanner detects that particular vulnerability, which drives the site forward and provides an incentive for the continuation of the model. This methodology also ensures the latest protection.

Detectify Co-founder and CEO Rickard Carlsson said the site uses crowdsourcing to stay relevant. “Modules from crowdsourcing hackers have now generated 110,000 plus vulnerabilities in our customer base, and the community is about 2.5 times as large now,” he noted.

The startup has been continuously growing, counting companies like Spotify, King and Trello as customers.

“Detectify brings together the power of human ingenuity, the immense scalability of software and a strong culture of transparency and integrity to provide world-class security to everyone,” said James Wise, a partner at Balderton Capital. “This is a fundamentally new approach to protecting businesses from new cybersecurity threats, and alongside our other cybersecurity investments, including Darktrace, Recorded Future and Tessian, we see Detectify as part of a new wave of solutions to make the web safer for everyone.”