Growing concerns about data privacy and security, as well as completely different motivations such as people wanting to access content that is otherwise blocked in their region, have prompted an estimated 30% of all internet users worldwide to use a VPN at some point this year.Nord Security, the company behind NordVPN, one of the most popular premium VPN services, is raising a large round of funding at a “unicorn” value to expand its consumer and enterprise business lines and capitalise on that success.
Lead by Novator—the European business that has supported Deliveroo, Stripe, and Tier, among others—led a $100 million round of fundraising, which also included Burda Principal Investments, General Catalyst, and individuals such as Ilkka Paananen.
Nord, based in Vilnius, Lithuania, has been bootstrapped for the past ten years (it was created in 2012), a situation that does not appear to have stifled its expansion. NordVPN and the company’s other security and identity management solutions, which include the NordPass password manager, NordLocker for cloud sync and storage, NordLayer for enterprise network access, and developer tools for building custom VPNs, have a combined user base of 15 million people.
Along with organic growth, Nord has been expanding through acquisitions: in February, the company announced a merger with Surfshark, a Lithuanian-based security firm (and more specifically, roots in the same business and incubator where Nord Security was also hatched, Tesonet). (Lithuania contributes as well).
So why are you raising it now? Co-CEO and co-founder with Eimantas Sabaliauskas, Tom Okman, told TechCrunch that the company decided to finally bite the funding bullet in order to keep up with the times while also staying true to its mission, which can be summarised as embracing the ideals of the open internet while protecting users from those who might exploit it with malicious intent.
“We noticed a shift in the digital privacy landscape…” as well as the fact that the open internet was not working as it should, “he stated. “Our objective is to create a fundamentally different internet by protecting consumer and enterprise accounts, as well as network data, from cyber threats all around the world.”
People frequently use VPNs to circumvent more restrictive internet policies (whether owing to geoblocked content, more controlling regimes, or something in between) or simply to keep their browsing more private, but the VPN industry hasn’t always succeeded in accomplishing these goals. According to critics, VPNs, particularly those that advertise themselves as “free,” but even those that charge for their services, have been criticised for not properly handling users’ data and potentially posing security threats to their customers.
NordVPN has also been subjected to some of the same complaints. In the previous three years, it has been linked to Russia directing VPNs to block particular websites, a data centre leak, and the discovery of some of its browser extensions.
When asked about these incidents and their impact on Nord, Okman responded that the company has evolved through time to solve many issues and improve.
“Since 2019, we’ve learnt our lesson and come a long way,” he remarked. Although no data was exposed as a result of the data centre intrusion, he said it prompted the corporation to restructure its security and modify how it handles data in general (the systems are now diskless, he said). Internal security teams were expanded, and the corporation now undergoes regular audits in collaboration with the American firm Versprite.
Instead of complying, the company chose to remove all of its business from Russia, and he claimed that the company was harmed as a result of the dispute.
Its main goal is to continue expanding enterprise and consumer services as a paid offering by a firm that, according to Okman, has amassed 100 patents as well as a different kind of ethos to develop the product and answer to a different standard. “Any illegal activity is prohibited, as defined in our terms of service,” he added. “This is the major differentiator and difference between paid VPN services and free VPN services.”
Nord had been bootstrapped and secretly built and grown, which meant it was difficult to have much visibility into how it was run and what it did. Furthermore, having a customer base that was predominantly made up of consumers meant that there was perhaps less due diligence involved.
Joseph Gutierrez holds Master’s degree in Business Administration. As an avid day trader, he is a master of technical analysis and writes tirelessly on how stocks are trading. Joseph has extensive knowledge in technical analysis & news writing. He delivers news reports regarding Market category.
