Washington, D.C. encryption software startup Virtru has closed a $29 million funding round. The new funding was led by Bessemer Venture Partners, which previously led a $6 million round for Virtru back in 2014.
Virtru is the latest in a recent frenzy of funding for local cybersecurity firms, each with their own particular angles and specialties. In Virtru's case, that's data encryption and digital privacy protection. That means making it impossible for any individual email or other packet of data sent online to get decoded illicitly. This "object level" security makes it so that even if the data were scraped from a database by hackers, they wouldn't be able to read what it says. And the timing arguably couldn't be better when it comes to the interest of organizations looking for ways to keep email and other online data safe after so many recent high profile hacks of exactly that kind of information.
"We've benefited from how mainstream the issue has become around the world," Virtru CEO John Ackerly told DC Inno in an interview. "Privacy is a major issue because bad guys can always find a way in. You have to protect privacy at the object level."
Ackerly, a former Bush administration technology advisor, co-founded Virtru with his brother and former NSA cybersecurity architect Will, with just a free browser plug-in to start. Individuals could use it to encrypt their emails, but the Ackerlys had much bigger ambitions, and have expanded to serve as the encryption software for more than 4,000 companies and other groups worldwide. Now that the team has developed platforms and background APIs for any group to apply the encryption method, the goal is to scale up to an international level, Ackerly said.
"There's an understanding that now is the time to scale not just here, but overseas," Ackerly said. "Right now we have about 80 percent of our business in the U.S. and 20 percent overseas. In the new years those numbers are going to flip."
The scaling up won't affect some of Virtru's core products though, Ackerly said. The offer of free services to qualified non-profit organizations still stands, for instance. That facet of the business played a role in attracting some of the investors, including Soros Fund Management, affiliated with billionaire George Soros who's worked on digital privacy issues via the Open Society Foundation.
"Privacy is a major issue because bad guys can always find a way in."
"Non-profits are super important to our mission," Ackerly said. "Soros [Fund Management] and the connection to the Open Society Foundation made them as investors very interesting to us. We have non-profits all over the world using [Virtru software], often focused on human rights."
Encryption is not without controversies. The debate over privacy versus security has only gotten more contentious in the wake of a very public fight between the FBI and Apple over how encrypts data on its products. Ackerly acknowledged that can be a tricky path to navigate, though it can vary based on what a compromise might entail. In the end, it's all about making sure that people and organizations can feel confident that they're online interactions are private, without secret backdoor ways to get at it.
"We founded Virtru before Edward Snowden was a household name," Ackerly said. "But, if a compromise [with law enforcement] means a backdoor, then never, there can never be a compromise on that. We already knew from working at the White House and the NSA how necessary encryption was to solve the basic societal need for privacy. That's our central mission."
