CyberSmart Raises $15 Million for an All-in-One Security and Insurance Solution Targeted at SMBs

Cybersecurity is an important area of companies to invest in and startups, and a company offering solutions to smaller businesses is announcing a financing round to satisfy that need. CyberSmart is the U.K. startup that has developed a platform that offers all-in-one cybersecurity solutions for medium and small-sized businesses and cyber insurance in case the worst happens — has completed an investment round in the form of a Series B. PS12.75 million ($15.4 million).

CyberSmart currently has 4000 customers in the U.K., with 1,800 of them also taking advantage of the insurance policies offered by the company — just the only tip of the iceberg within an industry that is home to 5.5 million of small and medium-sized enterprises (SMBs) all over the world however Jamie Akhtar, the co-founder, and CEO, stated that there’s plenty of interest and the company is focused on satisfying that demand at present and the strategy is to make use of the funds to develop its product, possibly to purchase some businesses and expand its channels, customers and channel partners within its own market, as well as within Europe, Australia, and New Zealand.

The financing is led by Oxx which is the European VC that focuses on growth round funding for SaaS startups. There are strategic backers and others taking part. The backers comprise British Patient Capital (the commercial subsidiary of the U.K. government’s British Business Bank), Legal & General Capital (affiliated with the insurance giant), and Solano Partners; previous backers IQ Capital, Eos Venture Partners, Winton Ventures, and Seedcamp are also taking part. The company previously had a round of PS8 million, but it’s not making public its valuation for this round. However, Akhtar stated that it was oversubscribed.

CyberSmart Raises $15 Million for an All-in-One Security and Insurance Solution Targeted at SMBs

 

Interest from customers and investors for an organization such as CyberSmart indicates a wider shift that we’ve observed within the industry. Small and medium-sized businesses were often left out in the field of cybersecurity. It was due to a number of reasons: while criminals generally focused their attention on the most lucrative victims as they were the most lucrative targets, SMBs are not known as big spending when it comes to any type of IT as a result of those reasons, the companies that developed the most exciting cybersecurity technology did not consider these as potential use cases or customers.

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This has drastically changed in the past. Not only is the rate of cybercrime increasing (up 38% by 2022 worldwide as per estimates by Checkpoint Research — but SMBs have been a major attack target and account for 58% according to research from 2019 by the Global Cyber Alliance.

Small and medium-sized businesses segment, as a consequence has become an increasingly important source of cybersecurity solutions. This includes other companies like Cowbell and Guardz that mix the notions of insurance and security and those that are focused exclusively on technology, and in particular, types of security-related incidents, like ActZero and its specialization on ransomware.

“SMEs are notoriously under-protected from the rising cyber threat, and existing cybersecurity and insurance propositions are neither fit for purpose nor affordable,” Phil Edmondson Jones, director at Oxx in an official statement. “We had to spend a lot of searching for the ideal business model that could bring about an important change in this and massive market. CyberSmart’s leading SME security solution, coupled with its unique capability to gather inside-out data regarding risk indicators that are real-time will enable the business to become a key component of the infrastructure that provides cyber security and insurance. We’re thrilled to help CyberSmart and its team of experts to accelerate the adoption of the product in the marketplace, and quickly expand internationally.” The CEO is also joining the board in this round.

Many of the activities may be brand new however CyberSmart isn’t: CyberSmart is actually six years old and therefore a pioneer innovator in identifying and focusing on SMBs using cybersecurity technology. CyberSmart was first conceived through an accelerator operated by GCHQ which is the U.K. equivalent of the NSA and NSA, with Akhtar developing the company out of his own experiences after having worked for over 10 years in cybersecurity at other companies.

“I could see that SME security was broken,” said the man. “So they weren’t aware of the risks cyberposed but they weren’t equipped with the resources or tools to address it. We approached the issue with this perspective.”

 

CyberSmart’s product is targeted towards those at the “S” end of SMB (or SME as it’s commonly known by the U.K.) It has typical customer sizes of between 10 to 50 employees with no plans to expand into larger enterprises, middle-market, or any other. Its primary sales channel is to the market CyberSmart recognizes and comprehends the best: It sells mostly through channel partners, who advise smaller businesses on their IT needs and offer the IT equipment and software in conjunction with that and with CyberSmart providing the security component of that product.

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“As cyber-attacks become more sophisticated, the technology required to guard against them must also evolve to keep up. For many SMEs that are in this situation, it’s an issue that is difficult to solve due to budgetary constraints or the absence of internal expertise,” added Catherine Lewis La Torre who is Director of British Patient Capital. “CyberSmart was established to address this issue, offering affordable and user-friendly cyber security but also education as well as certification and insurance. We are thrilled to assist such an innovative and dynamic company in its expansion.”

The security component is in the form of its most popular product Active Protect which Akhtar describes as a “baseline” security tool that is able to be installed and utilized without needing IT specialists to implement or manage it. Active Protect is distributed to employees through a link that is available for download on any device connected to the network of a company, and once it’s installed, it offers ongoing monitoring, as well as an alert and guidance whenever it detects any suspicious activities, and the option to require employees to undergo training in order to become more aware and alert to common threats (email and phishing being among the more prevalent that is due to human making phone calls). The program’s goal is to identify one of the “most common” vulnerabilities.

Additionally, CyberSmart has built out an insurance service in partnership with Aviva along with Superscript. It is included in Active Protect but it only becomes a rule when a user follows all the guidelines to protect devices, takes care of security concerns when they are recognized, and has completed the training when it is suggested.

This is a two-pronged approach: Akhtar believes that a large portion of SMBs may not opt for cyber insurance due to the cost of high cost, and therefore offering something for free addition will make it easier for more customers to sign up for the security program. In addition to price, Akhtar believes that a large portion of cyber insurance targeted specifically at the SMB market is difficult to market due to the specific requirements that must be fulfilled for assistance. The direct connection to how the security policy is managed is the best way to go. (These are probably two major reasons we’re witnessing a variety of other companies offering cybersecurity solutions in conjunction with insurance, too.)

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Also, Akhtar tells me that since the company introduced the insurance program a little about a year ago, there’s been no complaint made against an indication of his opinion, of the formula that his company has developed functioning just as it is supposed to.

However, there are some holes in the information CyberSmart offers to the market for instance if most frequent security vulnerabilities are being addressed isn’t it only the case that hackers begin attacking SMBs using ever more sophisticated strategies? If the primary method of remediation is to provide direction to the company’s team of human workers could there be a way to complement that with more automated methods or technology that is able to combat more sophisticated attacks? These are the areas in which CyberSmart could be creating more tech or adding additional functions through acquisitions.

Concerning acquisitions, Akhtar noted that his personal fundraising experience this time round truly exposed the conditions of the market today. “I spoke to hundreds of VCs over nine months,” I told him (and when I was asked to use an emoji to describe his face at the time it would be one that has the slightly shaky smile and the smudge of sweat dripping down the side ).

 

In the case of CyberSmart He said that it was due to the fact that the CyberSmart team was selecting their partners and were seeking partners who can help in business growth as well as growing bank accounts. In general, it demonstrates how difficult it is to close deals for a large number of companies and, in the future, there could be tech-savvy entrepreneurs who have run out of runways or received bad financing offers, and who may prefer to sell for a lower cost and join forces with a partner to develop something.

Sunil Kumar writes about smartphones and laptops for Gadgets360TechNews, out of Delhi. He is the Deputy Editor (Reviews) at Gadgets360TechNews. He has frequently written about the smartphone and PC industry and also has an interest in photography.

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