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Why This Google Ventures-Backed Cybersecurity Startup Thinks China Is ‘Critical’
As a flurry of internet-enabled innovations begin taking advantage of the disposable wealth among China’s growing middle class, cybersecurity concerns continue to loom over the country.
The government steadfastly claims that China is the biggest victim of global cyber attacks, while outside the political realm internet giants face the challenge of protecting their ever-expanding consumer-facing empires.
U.S.-based Shape Security Inc., who specialize in ‘botwall’ cybersecurity technology, announced a $25 million USD series D this month, aimed at fueling their expansion in China. The series was led by Baseline Ventures and followed by Beijing-based Northern Light Venture Capital, bringing the company’s total funding to $91 million.
They join existing investors Kleiner Perkins Caufield & Byers, Norwest Venture Partners, GV Capital (formerly known as Google Ventures) and Tomorrow Ventures, backed by Alphabet chairman Eric Schmidt.
According to Sumit Agarwal, co-founder and VP of strategy at Shape Security as well as a formal Google executive, the Chinese market is vital. “We view expansion into China as critical for our long term success,” said Mr. Agarwal in an email to Technode. “Specifically for visibility into cybercriminal attacks on international B2C companies.”
Mr. Agarwal also pointed to potential vulnerabilities arising from rapid development in China’s internet industry. “We see massive opportunity in China because it is home to tech giants that are on track to surpass, and in some cases already have surpassed, their US counterparts,” said Mr. Agarwal.
“Especially in the area of e-commerce, these companies are facing the same security challenges posed by cyber criminals, competitors, and nation-states.”
Shape Security’s product targets ‘bots’ which search out website vulnerabilities through automated scans. The company’s tool, which can be completely deployed via the cloud, constantly modify parts of the source code to throw off the automated scans.
“Google and Facebook have invested hundreds of millions of dollars to create and operate sophisticated custom defenses for their applications,” the company says on their website, noting that they aim to provide “a level of protection previously unattainable for most organizations.”
According to Mr. Agarwal, Chinese companies are keen to get their hands on the technology. “We actually had Chinese customers approach us as we’re seeing their ambitions and huge amounts of capital take them to Silicon Valley.”
Shape Security is currently in the process of seeking a local partner in China, and will be announcing these plans later in 2016.