The series A funding round is the largest to be led by Scottish business angel investment syndicate Archangels, and has also brought in co-investment from the Scottish Investment Bank and TriCap. The trio of investors were involved in a £650,000 fundraising for the firm in 2015.
ZoneFox, currently based at the CodeBase technology incubator, said it was planning a move to new headquarters in Edinburgh as it seeks to grow its ten-strong headcount to 30 by the end of the year. It is also set to establish an office in London, bolstering its sales and technology team.
The spin-out from Edinburgh Napier University, which counts Zenith Bank and Grand Theft Auto developer Rockstar Games among its clients, recently unveiled a new “machine learning” product that will allow companies to monitor unusual use of data by their staff and instantly flag any security risks.
Chief executive Jamie Graves said: “ZoneFox has been working exceptionally hard over the last six years to develop a product that will provide the modern enterprise with a truly 21st century cyber-security solution.
“Insider threats are a serious problem for global enterprise. Such is the sophistication of these attacks and the methods used by cyber-criminals, the human mind alone can no longer be expected to monitor and combat such threats alone.”
He added: “We have established a strong reputation and generated a lot of interest from some global organisations, which have in turn become clients. Having the funding and support of Archangels, the Scottish Investment Bank and TriCap will allow us to continue to grow and develop ground-breaking solutions that will protect businesses.”
The funding round comes after ZoneFox saw its revenues soar by 400 per cent last year and follows the recent appointment of former BT and O2 board director Steve Davies as its chairman. In November the firm won the international contribution to cyber security and “champion of champions” awards at the inaugural Scottish Cyber Awards.
Niki McKenzie, investment director at Archangels, said: “Archangels’ investors were keen to lead this round of follow-on funding in an area that is currently underserved.
“Customers using ZoneFox report that the product is helping them to shape more robust, tailored and effective IT policies, alerting them to security threats from within their own walls.”