28 Jan VC Firm Pours Rocket Fuel Into Cybersecurity Rocket Ship
Evolution Equity invests much more than money into SecurityScorecard
Melbourne, Australia – Jan. 28, 2022
It may be a billion-dollar unicorn and VC darling now, but in its early days back in 2013, co-founder and CEO Aleksandr Yampolskiy recalls, SecurityScorecard’s founders were having trouble finding venture capitalists who believed enough in the idea to back it with money.
“When we started talking to investors back in 2013, people just didn’t understand the power of what it could become,” he told Cybercrime Magazine.
“One investor said we would never be able to build it. Another rejected me because it wasn’t as interesting as a consumer iPhone app he had invested in.”
Yampolskiy knew the idea — to produce a consistent way of measuring enterprise security that would enable benchmarking and regular audits of companies’ security postures — had potential, but without VC support the idea was dead in the water.
“Venture funding to a cybersecurity company is important, just like the need to have electricity in your apartment,” he explained. “It allows you to put fuel on the fire, to run fast, to develop the prototype, to educate the market.”
It was only when Yampolskiy was introduced to Richard Seewald and his VC firm, Evolution Equity Partners, that things started to click — and the SecurityScorecard success story began to take shape.
“It took quite a bit of time to find the people who really deeply understood enterprise technology and cybersecurity,” Yampolskiy recalled. “I immediately felt like Richard understood security very, very deeply.”
“He had the experience of being behind AVG antivirus in Europe, and taking it all the way to an IPO [in 2012] — so he could see the potential of what SecurityScorecard could become when most other investors couldn’t.”
Living the dream together
What SecurityScorecard has become, in just over eight years, is a fast-growing industry disruptor that is pushing business and IT executives to think differently about cybersecurity.
Instead of burying it in the bowels of the IT function and throwing money down a dark hole, SecurityScorecard’s ability to derive meaningful metrics around cybersecurity posture has provided a much easier way for IT and cybersecurity executives to engage with the rest of the business — and track progress over time.
A recently announced partnership with risk management expert Marsh McLennan, for example, will lever SecurityScorecard into a broad range of new business discussions — while the firm also recently reported that growth doubled during 2021 as it expanded to 64 countries and 30 industries.
With $292.2 million in total funding secured to date on a valuation of around $1 billion, the company has built up enough momentum to continue its growth trajectory — but Yampolskiy is quick to point out that it took much more than money to turn his idea into a force for industry change.
“It’s very rare to find great investors like we have, who have experienced every leg of a journey and can provide you the trusted, important counsel. We were very selective and very picky about the syndicate we formed, and we’re privileged to be in the position where we are.”
Yampolskiy offers three key bits of advice for aspiring cybersecurity startup founders.
“Look for a partner with deep experience in enterprise and cybersecurity and who can tell you what to expect on each leg of the journey,” he advises, “and look for good people who are honorable and honest, and whose company you’re going to enjoy.”
And the third?
“You want to be treated fairly and look for a competitive deal,” he said, “and we were lucky and privileged that Evolution filled all three of those criteria.”
“They were a critical partner when we went from zero to $2 million, to $10 million, to $20 million, to $200 million. Very few investors have the expertise at each stage; some focus on later states, and some focus just on the earliest stage.”
“But we were lucky to find a partner who could guide us through every stage of the journey. So, when you look for that partner don’t look just for capital; look for the right partner for your business.”
– David Braue is an award-winning technology writer based in Melbourne, Australia.
Go here to read all of David’s Cybercrime Magazine articles.
Evolution Equity Partners is an international venture capital investor partnering with exceptional entrepreneurs to develop market-leading cyber-security and enterprise software companies.
Based in New York City and Zurich, Switzerland, the firm is managed by investment and technology entrepreneurs who have built companies around the world and leverage their operating, technical and product development expertise to help entrepreneurs win.
Evolution has interest in companies utilizing big-data, machine learning, artificial intelligence, SaaS, mobile and the convergence of consumer and enterprise software to build leading information technology companies.