Tech Transformers

Cybersecurity start-up Darktrace raises $65 million backed by KKR


Darktrace, a U.K. cybersecurity firm that positions its software as the "human immune system" for networks, has raised $65 million in a funding round led by U.S. private equity giant KKR, the start-up said on Wednesday.

Existing investor Summit Partners contributed while new investors TenEleven Ventures and SoftBank joined the round. The British start-up is also backed by Autonomy founder Mike Lynch's Invoke Capital and London-based venture capital firm Hoxton Ventures.

Darktrace's solution sits in the middle of an organization's computer network and can detect cyber-threats in real-time, allowing the company's security team or the software to take action to protect the system.

The Darktrace cybersecurity software demonstration showed how a global problem (instrusion) can start with just one employee's work station.
Michael S. Williamson | The Washington Post | Getty Images

The start-up has been developing its machine learning capabilities – advanced algorithms that can adapt and learn. Darktrace says that its machine learning techniques are based on the "biological principles of the human immune system".

Hackers pose a huge threat to businesses with cyber-crime forecast to cost businesses over $2 trillion by 2019, according to Juniper Research. Some of the biggest organizations in the world have been victims of cyber-attacks and this has meant cybersecurity companies have gained traction.

Start-ups like Darktrace are attempting to challenge established players such as FireEye and Symantec. And as cyber-attacks get more sophisticated, machine learning solutions are becoming increasingly important.

A new threat identified by Darktrace is the ability for hackers to program machines to carry out attacks. In this way, machines are attacking machines, something that can be hard to stop as computers are able to adapt their own attack methods.

Ransomware is another attack that has been on the increase which involves hackers locking a person's files and then demanding something in return for unlocking them.

To combat these threats, Darktrace released a product called Antigena, which the chief executive describes as "machine fighting machine tech". Antigena allows a business's network to battle back against invading threats.

"We have some early customers using Antigena, and what we have seen as the first use case is slowing down the attack, allowing humans to catch up. One example of that would be Ransomware. We could detect ransomware as soon as it hit the machine, slow it down and stop it getting to the back-up servers," Nicole Eagan, CEO of Darktrace, told CNBC in a phone interview on Wednesday.

The start-up was founded in 2013 and has already grown to 300 employees and claims to have over 1,000 customers on board. Darktrace said it has achieved over 600 percent revenue growth in the latest financial year.

Cybersecurity has been one of the hottest sectors in the start-up world for investment and Darktrace faces competition from a number of players. Last month for example, cybersecurity start-up LightCyber raised $20 million. LightCyber has a product which it calls a "behavioral attack detection" platform capable of fighting against threats that have got past traditional security controls.

Eagan said that the $65 million funding will help Darktrace expand further into the U.S. and Asia as well as into new markets such as Latin America, hiring employees, opening offices on the ground and improving its technology.

"We are going to continue to invest in R&D. The initial Darktrace product is fully developed with a lot of the focus on machine fighting machine and the new wave of artificial intelligence attacks, so we will continue to build out our machine fighting machine tech," Eagan told CNBC.

Correction: This story was updated after Darktrace corrected the figure it raised to $65 million

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