Nord Security, the startup behind NordVPN, raises its first-ever funding, $100 million at a valuation of $1.6 billion – MovieUpdates

VPN use has skyrocketed in recent years, with growing concerns about data privacy and security – and sometimes completely different motivations, such as people wanting to access content that is otherwise blocked in their regions – affecting an estimated 30% of all internet consumers. using a VPN worldwide. sometime this year. Now Nord Security, the startup behind one of the larger paid VPN providers, NordVPN, is announcing significant funding at a “unicorn” valuation to build out both its consumer and business lines of business to capitalize on that growth.

The company has raised $100 million in a funding round led by Novator – the European company that backs Deliveroo, Stripe, Tier, among others – with Burda Principal Investments and General Catalyst, and individuals including Ilkka Paananen of Supercell, Miki Kuusi of Wolt, and Matt Mullenweg of Automattic are also participating. This round values ​​the startup at $1.6 billion.

What stands out here is that Vilnius, Lithuania-based Nord has been up and running in the past 10 years (it was founded in 2012), a state that doesn’t seem to have held back its growth. NordVPN and the other security and identity management products Nord sells — including the NordPass password manager, NordLocker for cloud sync and storage, NordLayer for enterprise network access, and developer tools to build custom VPNs — have collectively grown to 15 million users over the years.

In addition to its organic expansion, it is also expanding through mergers and acquisitions: in February, Nord announced a merger with Surfshark, another security company with Lithuanian roots (and more specifically, roots in the same company and incubator where Nord Security was founded, Tesonet). ).

So why raise now? Tom Okman, the co-CEO and co-founder of Eimantas Sabaliauskas, told MovieUpdates that it had made the decision to finally bite the funding bullet to keep up with the pace of time, while also staying on track with its mission, which can best be summed up as embracing the ideals of the open internet, but to do so in a way that protects users from those who can abuse it with more malicious intent.

“We saw the changing landscape in digital privacy… and the open internet not working as intended,” he said. “Our mission is to build a radically different internet by securing consumer and business accounts and network information from cyber threats around the world.”

VPNs are often used by people to get around more restrictive internet policies (either because of geo-blocked content, or more controlling governments or something in between), or simply to keep their browsing more private, but the VPN industry hasn’t had a completely smooth ride. fulfilling those goals. Critics have denounced how VPNs, especially those that advertise themselves as “free” but also some that charge for their services, don’t handle users’ data responsibly and can actually pose security risks to their users.

Some of that criticism has also hit NordVPN. In the past three years, his name has been mentioned in connection with Russia ordering VPNs to block certain sites, a breach of one of its data centers and some of its browser extensions not working as they seem.

Asked about these events and what the impact has been on Nord, Okman said the company has changed over the years to address the different issues and do better.

“We have learned our lesson and have come a long way since 2019,” he said. The data center breach revealed no data was compromised, he said, but it urged the company to reconfigure security and change the way it handles data in general (the systems are now diskless, he said). The internal security teams have been expanded and the company now undergoes regular audits, in collaboration with US company Versprite.

The struggle with Russia prompted the company to pull all of its business out of the country rather than comply, and he said the NordVPN now has very few users in the country.

Its main goal is to continue building business and consumer services as a paid offering, a company that Okman says has not only accumulated 100 patents, but also has a different kind of ethos to improve the product and set it to a different standard. reply. “We prohibit all illegal activity and we define that in our terms of service,” he added. “That’s the big difference, and a distinction between paid VPN and free VPN services.”

The fact that Nord had started up and was quietly building and growing also meant that it was less easy to have a lot of visibility into how it was run and what it was doing. And having a customer base made up mostly of consumers may have also meant less due diligence on how the product worked. More recently, Nord’s growing entrepreneurial activity, along with this latest addition of high-profile investors and high valuation, not only gives the startup more exposure, but potentially more oversight.

“Modern internet security requires a completely new approach to address the secular growth of risk from increasing data regulation and ever-worsening cyber threats,” Birgir Már Ragnarsson, managing partner at Novator Ventures, said in a statement. “Tom and his team are well positioned to deliver and usher in the new era of Internet security with a powerful and best-in-class suite of privacy and security tools designed to protect information, accounts and networks. It’s rare to find a company that can already demonstrate such an outstanding track record, brand credibility and relentless focus on serving customers, so we’re excited to partner with Nord Security to support the team in executing their vision at scale.” Ragnarsson joins the board with this round.

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