D.C. cybersecurity investor Paladin Capital Group closed on an oversubscribed $372 million fund that it has already begun deploying in cyber firms across multiple fundraising stages.
Initially, the firm’s target for its Cyber Fund II was $250 million, but ultimately it far surpassed that. The company said the oversized raise included both new and existing limited partners “across the globe” — Fortune 500 corporations, sovereign wealth funds, family offices, high-net-worth individuals, and fund of funds — tapping into a growing demand for data security services in an era of remote work.
“At a time when cybersecurity could not be more important, Cyber Fund II is investing in digital solutions of absolute need to advance, sustain and defend critical infrastructure and modern society,” said Michael Steed, founder and managing partner of Paladin Capital Group, in a statement.
In its 21-year history, venture capital firm Paladin said it has committed more than $1 billion in investments to more than 65 companies. That includes last fall's investment in Herndon cybersecurity firm Expel Inc., marking Greater Washington's sixth-largest venture capital deal of 2021 and propeling the local company to unicorn status, meaning its valuation topped $1 billion. Paladin said its newest fund will focus on “high-priority cybersecurity and online safety sectors, including innovative technologies that protect critical infrastructure from cyberattacks and networks from ransomware,” which has been a growing threat among even major corporate and consumer brands.
With offices in D.C., New York, Luxembourg, London and Menlo Park, California, Paladin said its portfolio of companies spans North America, Australia, Europe and South America.
So far, Paladin has invested roughly $75 million from its newest fund into 17 companies, the firm said. That includes leading a $15 million Series B funding round in May for Nisos, an Alexandria cyber intelligence firm. Nisos has said it plans to use the funding to add staff and invest in its proprietary platform, among other moves aimed at speeding up its growth. Paladin also led the Series A rounds for Boynton Beach, Florida-based development, security and operations firm Corellium, at $25 million, and for London’s Virtuoso, a quality assurance software firm that collected $13 million.
Last month, Paladin also led a $9 million seed round for Hubble Technology Inc., an early-stage cybersecurity startup based in Reston. With the seed funding, Hubble said it would grow its local engineering team to meet increasing demand.
This latest venture fund is Paladin Capital Group’s third currently active fund, according to its website; with Paladin Cyber Fund, it focused on tech companies that work on digital infrastructure. Its Paladin III Fund is deploying follow-on investments for existing portfolio companies and focuses on “disruptive cyber and advanced technologies and, to a lesser extent, alternative energy."
