Finnish cybersecurity startup Hoxhunt raises $40M amid raising cyberattack numbers

With the ongoing global economic downturn, it’s becoming increasingly difficult for cash-strapped startups to raise funding to support their operations. Many have turned to capital preservation measures including layoffs to keep their business afloat.

But while many technology startups are still struggling to raise new funding, that has not stopped investors and venture capital firms from pouring billions into startups in high-demand sectors like fintech, healthcare, and cybersecurity. One of these startups is Hoxhunt, a Helsinki-based Hoxhunt is a People-First Cybersecurity Platform that protects organizations and their employees from the risk of cyberattacks. Hoxhunt also helps organizations turn their employees into their greatest cybersecurity assets.

Today, Hoxhunt announced it has raised $40 million in Series B funding led by New York-based Level Equity Management, with participation by existing investor Icebreaker.vc. To date, Hoxhunt has raised $43 million in total funding including a $3M Series A and $40M Series B.

Hoxhunt will use the new capital infusion to aid the development of its technology and accelerate growth in new markets, particularly North America.

Founded in 2016 by Mika Aalto and Pyry Åvist, HoxHunt offers enterprise-grade AI that simulates real phishing attacks on organization users. The company also features a fully automated service simulates real attacks and shows the techniques attackers use to infiltrate organizations. Employees are rewarded for reporting the attacks – both real and simulated.

Since its inception six years ago, Hoxhunt has grown from four co-founders to 120-and-quickly-growing Hoxhunters globally. The startup currently hosts over a million end users, who receive up to 36 phishing simulations a year in 30 supported languages. Over 10 million threats have been analyzed.

According to Deloitte, Hoxhunt is Finland’s fastest-growing SaaS company. Unlike other cybersecurity approaches,
Hoxhunt makes good email cybersecurity a habit. Hoxhunt’s gamified platform rewards employees for reporting simulated and real email threats, using machine learning to create millions of individualized phishing simulations. Hoxhunt lightens the load for security teams who, aided by an elite customer success team, can upskill whole organizations with unprecedented engagement rates at the push of a button.

Cybercrime represents an ever-worsening pandemic costing global businesses trillions of dollars per year. Email is the main vector of transmission as 90% of all breaches, from ransomware to Business Email Compromises, are initiated by a phishing email. Hoxhunt is turning the tide on phishing attacks with breakthrough innovation. Their unprecedented results are supported by hard data and glowing testimonials from partners like Microsoft and Deloitte, and customers such as DocuSign, G2, and a number of governmental agencies.

“Email is the biggest threat to enterprise security; that’s why human nature is the most important cybersecurity challenge to solve, instead of building incrementally better mousetraps at the technical perimeter,” says Hoxhunt CEO Mika Aalto. “Our first-to-market platform enables measurable behavior change and cultural transformation. Our fundamentally different approach combines personalized and hyper-realistic training, adapted to each individual’s skill, role, location, and language.”

The cybersecurity market has seen explosive growth over the past two years. Cybersecurity spending is projected to grow from $262.4 billion in 2022 to $458.9 billion in 2025, with tightening regulatory and insurance pressure driving higher expenditure on awareness. Cybercrime costs are projected to swell to $10.5 trillion annually by 2025.

“There is tremendous growth potential in the cybersecurity awareness category, which we at Level Equity Partners are thrilled to invest in again with Hoxhunt, who we see as best-in-class in terms of innovation, product design, and leadership,” said Sarah Sommer, co-Founder and Partner at Level Equity Management.

“In just two years, the number of cybersecurity unicorn companies has jumped from 6 to over 50, but too few are security awareness vendors. Next-level security training represents a huge opportunity in terms of ROI and, more importantly, doing good for the world.”