Wallarm, a Skolkovo resident cybersecurity startup, has attracted $2.3 million in investment upon completing the prestigious Silicon Valley seed accelerator programme Y Combinator.
Three quarters of the Wallarm team pictured at Y Combinator in Mountain View, California. Photo: Wallarm.
The investment is being put up by the venture funds Gagarin Capital and Partech Ventures, along with private investors and partners of Y Combinator who have chosen to back Wallarm, which uses machine learning to identify malicious requests received by web applications, combining the functions of a firewall and vulnerability scanner.
“It’s very important for us not to stop at the level we have reached so far but to keep going, and that’s why we decided to attract external investment in the company, despite its profitability,” said Ivan Novikov, CEO of Wallarm.
“To develop on the U.S. market, we will need to set up a new, local team, and that will entail considerable expenses. We came to Silicon Valley not to play, but to win, and that’s far from easy in such a competitive environment,” said Novikov.
Wallarm began the three-month Y Combinator programme, described by Fortune magazine as “a spawning ground for emerging tech giants,” earlier this year. One of the biggest business accelerators in the U.S., Y Combinator provides seed funding and mentoring to IT startups in exchange for 7 percent equity.
The cybersecurity startup already lists the major Russian search engine Yandex among its clients, as well as online retailer Ulmart and several banks and payment systems. It produces joint products together with the leading cybersecurity company InfoWatch and Qrator Labs, a fellow Skolkovo resident, and is also partnered with the web server NGINX, which is used by about 40 percent of the world’s top 1,000 websites.
Sergei Khodakov, head of information security technologies within Skolkovo’s IT cluster, said he expected the investment to enable Wallarm to strengthen its position in Russia, as well as to successfully continue its commercialization on the international market.
“Wallarm has demonstrated how startups can go in a short space of time from creating their first product to its commercial launch within leading Russian internet companies with high traffic volumes, such as Yandex, Ulmart, Eldorado and Groupon Russia, as well as making sales on the global market,” said Khodakov, adding that Skolkovo had provided the company with marketing expertise, as well as financial support via a grant.
The startup received a mini-grant of 5 million rubles ($76,000) from the Skolkovo Foundation to develop its product in March this year, after winning the foundation’s iSecurity competition. In 2013, Wallarm raised $500,000 in investment from Runa Capital, a tech-focused venture capital company with offices in Moscow and San Francisco.