A San Francisco startup that works with well-intentioned hackers to discover and report bugs raised $102 million in a later-stage round led by General Catalyst.
Bugcrowd announced the megaround on Monday, which it described as a "strategic growth financing" round. Rally Ventures and Costanoa Ventures also participated in the funding.
Its investors reportedly valued the company at more than $1 billion, according to Venture Beat.
The company declined to comment on its valuation but said the new round brings its total funding to $192 million.
Megarounds of $100 million or more exploded a few years for U.S.-based startups raising Series A through D rounds but have since declined, according to Crunchbase. There were more than 550 such rounds in 2021, and around 100 of them in 2023.
One of Bugcrowd's existing investors introduced the team to General Catalyst Partner Mark Crane a little over a year ago, Bugcrowd CEO Dave Gerry told me, and that ultimately led to the funding round.
"It was a competitive round. There were multiple players involved all the way up until the end. So, we were very fortunate on that front, and I think that points to: we're not seeing challenges in our business today for the macro indicators that a lot of people talk about. We're seeing the business grow incredibly quickly. We're seeing customers renew at higher than ever rates. We're seeing them buy more," Gerry said. "We're really excited, happy where we landed with it."
Gerry joined the company in 2022, first as COO before he was appointed as its chief executive officer a few months later, according to previous press releases.
Other providers of crowdsourced bug bounty programs include San Francisco-based HackerOne and Redwood City-based Synack. HackerOne had more than 830,000 registered hackers in its program as of 2020, according to Statista.
Bugcrowd says it has more than 500,000 hackers registered on its platform, and it touts nearly 1,000 clients, including OpenAI, which joined last year.
Interest in artificial intelligence has exploded globally over the past couple of years, sparked in large part by OpenAI's two flagship generative AI products: ChatGPT and DALL-E 2.
That spike in interest has led not only to an increase in bad actors utilizing AI but also growing needs for businesses, Gerry said, around issues such as data security, efficiency, visibility, testing and bias training, Gerry told me.
"We can handle all of the demand that we're seeing," Gerry said. "We are not constrained by typical capacity planning issues. Given the size and the nature of the community, the hacker community side of this business, we have the ability to scale really quickly."
Now armed with more than $100 million in fresh capital, Bugcrowd will be accelerating its expansion plans around the world and beefing up its crowdsourced bug bounty program.
The company might also look for strategic acquisitions to fuel its growth.
Bugcrowd was founded in 2012 and was originally based in Australia but relocated to the U.S. the following year.
