Today, the Finnish cybersecurity training platform Hoxhunt announced it raised a $40m Series B round led by New York-based Level Equity Management, with existing investor Icebreaker.vc also participating.

What does Hoxhunt do?

Hoxhunt, founded in Helsinki in 2016, protects companies from cyberattacks via email. The SaaS startup has developed a platform with millions of phishing simulations to teach employees how to detect possible threats. By using gamification, Hoxhunt rewards employees for reporting simulated and real email threats. So far it has analysed 10m threats.

“Email is the biggest threat to enterprise security; that’s why human nature is the most important cybersecurity challenge to solve, instead of building incrementally better mousetraps at the technical perimeter,” says Hoxhunt CEO Mika Aalto.

Why does phishing matter?

The cybersecurity threat to companies and states has grown quickly in the last few years. According to a survey conducted last year by KPMG nearly a fifth of CEOs see cybersecurity risks as the number one threat to their company’s growth over the next three years.

And they have a good reason to worry. Cybercrime grew during the pandemic, and in Europe alone cyberattacks increased by 68% last year — the largest regional increase globally.

But it isn’t just the attacks on businesses that are increasing. With the invasion of Ukraine the threat of disinformation, seen as a new kind of cybercrime, has increased. In Sweden, the government openly shied away from a referendum on whether to apply for membership in Nato due to the risk of disinformation attacks from Russia.

The cybersecurity market

Cybersecurity spending is projected to grow from $262.4bn in 2022 to $458.9bn in 2025, according to Cybersecurity Ventures. That has in turn led to an increase in investments by investors. According to Crunchbase, 2021 set a record with global VC money invested in the sector surpassing $21.8bn.

Hoxhunt is just one of the cybersecurity startups that are on the rise in Europe. Last year, Swiss unicorn Acronis raised $250m at a $2.5bn valuation and French unicorn Shift Technology raised $220m.

Sifted take

By focusing on employees’ understanding of phishing and helping them detect cyber attacks themselves, Hoxhunt is different from most other cybersecurity startups with a more technical solution. And with the increased threat to companies, there could be a bright future for startups in this space, Hoxhunt included.

Mimi Billing is Sifted’s Nordic correspondent. She also covers healthtech, and tweets from @MimiBilling