Bugcrowd secures $102m for 'bug bounty' security platform tapping 500k+ hackers

Bugcrowd, a company that connects with a large community of hackers to help find and fix bugs in software for clients like OpenAI and the U.S. government, has just received a huge investment of $102 million. This funding round is led by General Catalyst, with contributions from existing investors Rally Ventures and Costanoa Ventures. To date, Bugcrowd has raised over $180 million.

The CEO, Dave Gerry, mentioned that the company's value has significantly increased since their last funding round in 2020. Although the exact valuation is not shared, it's hinted to be a substantial growth from the previous $30 million Series D round. For context, Bugcrowd's competitor, HackerOne, was valued at $829 million in 2022.

With this new investment, Bugcrowd plans to grow its operations both in the U.S. and internationally. This could include mergers and acquisitions and enhancing the platform's features. Besides bug bounty programs, Bugcrowd offers penetration testing, attack surface management, and hacker training to improve their skills.

Described humorously by Gerry as “a dating service for people who break computers,” Bugcrowd essentially operates a two-sided security marketplace. It connects coders, who must prove their hacking skills to join, with organizations needing their code tested for vulnerabilities. These coders range from full-time freelancers to professionals looking to earn extra on the side.

This growth taps into the increasing reliance of organizations on technology, which, while expanding operational capabilities, also increases the risk of security vulnerabilities. Despite the rise of AI tools aimed at automating security, the demand for human hackers remains strong. These individuals often use a mix of manual techniques and automation tools to identify and fix bugs.

Bugcrowd has seen its revenue approach $100 million annually, growing at over 40% each year. Originally founded in Australia, it's now based in San Francisco and has amassed a network of over 500,000 hackers, adding around 50,000 new hackers each year. The company has also grown its client base to 1,000 customers, adding 200 in the last year alone.

Jim Wilson from Costanoa Ventures praised Bugcrowd's evolution from a novel idea to a key player for major companies, highlighting the leadership's deep understanding of cybersecurity trends and the company's potential for further growth and product expansion.