Ratings Firm SecurityScorecard Raises $180M To Grow Globally

‘We realize that the security ratings market we created is at a tipping point. We really feel that Chapter 2 for SecurityScorecard is here,’ Co-Founder and CEO Aleksandr Yampolskiy tells CRN.

SecurityScorecard has closed its Series E round to expand globally, add functionality, invest across new product lines, and broaden its partner ecosystem.

The New York-based security ratings vendor said the $180 million of funding will accelerate investments around deeper threat intelligence as well as in a suite of products on top of SecurityScorecard’s platform designed to assess and mitigate risk. The funding round included a consortium of both new investors like Silver Lake Waterman as well as existing investors such as Evolution Equity Partners, the company said.

SecurityScorecard recently launched a marketplace of applications and services on top of its security ratings platform, and is looking to expand its board-level reporting capabilities as well as its insights around company hierarchies, Co-Founder and CEO Aleksandr Yampolskiy told CRN. The hierarchy platform will allow SecurityScorecard to benchmark scores for company subsidiaries and business units.

[Related: SecurityScorecard Taps Palo Alto Networks Vet For Global Channel Growth]

“We realize that the security ratings market we created is at a tipping point,” Yampolskiy said. “We really feel that Chapter 2 for SecurityScorecard is here.”

From a geographic standpoint, Yampolskiy said SecurityScorecard first expanded outside the United States roughly 18 months ago, and international sales account for less than 20 percent of the company’s overall revenue today. Yampolskiy said he’d like to get international to at least 30 percent of the company’s sales in the long run.

Thus far, Yampolskiy said United Kingdom, Germany and France have been strong and important markets among the 49 different countries SecurityScorecard currently serves. The company also has a presence in Japan said, and Yampolskiy said he’d love to see more expansion in Asia as well.

Yampolskiy said he’d like to see SecurityScorecard carry out further international expansion and launch additional products before pursuing an initial public offering (IPO) in a couple of years. The company sells exclusively through the channel, and Yampolskiy said solution providers should expect to see a certification program as well as more market development funds (MDR) for the most valued partners.

“We’re excited about the channel, and are 100 percent committed to the channel,” Yampolskiy said.

SecurityScorecard was founded in 2013, employs 253 people, and has raised $292.2 million in seven rounds of outside funding, according to LinkedIn and Crunchbase. Prior to Thursday’s funding announcement, SecurityScorecard most recently closed a $50 million Series D round led by Riverwood Capital in June 2019.

The company said it has seen expanded use cases for its platform across vendor risk management, self-monitoring, board reporting, cybersecurity insurance underwriting, and M&A due diligence. The tools can be used by regulators who are investigating breaches as well as by companies to communicate with their boards, hold suppliers accountable, and make their own business more resilient, Yampolskiy said.

“SecurityScorecard’s business is uniquely positioned in the security ratings space with a product platform that is an indispensable tool for enterprises and insurance providers seeking to understand the security posture of their organization and third parties,” Evolution Equity Partners Managing Partner Richard Seewald said in a statement.

Despite the turbulent business climate during COVID-19, SecurityScorecard said its international recurring revenue grew by 61 percent on a year-over-year basis during the fourth quarter of 2020 while its total number of international customers grew by 89 percent over the same timeframe. The company added more than 450 new customers in 2020 and several influential international alliance partners.