Valimail, a cloud-based platform that uses automation to help companies establish the authenticity of emails, has raised $25 million in a series B round of funding led by Tenaya Capital, with participation from Shasta Ventures, Flybridge Capital Partners, and Bloomberg Beta.
Founded out of San Francisco in 2015, Valimail’s platform adopts open standards systems such as DMARC (for “Domain-based Message Authentication, Reporting and Conformance”) to prevent fraudsters from fooling businesses through targeted email attacks such as phishing. The company claims clients such as Uber, Yelp, WeWork, and Fannie Mae.
Despite rumors to the contrary, the age-old communication conduit known as email remains in rude health. Last year, there was thought to be around 3.7 billion email users globally, a figure that could pass the 4 billion mark by 2021, according to research firm Radicati. Roughly 270 million emails were sent daily in 2017, and that metric is expected to grow to 280 million this year. Messaging apps such as Messenger and WhatsApp may be popular, but email is still particularly critical in the enterprise and B2C realm.
However, phishing scams have led to a number of high-profile data breaches in recent years, affecting myriad big names such as Snapchat and DocuSign. The exact methods vary, but a typical phishing attack may entail an external bad actor setting up a similar-looking email address to that of a company and assuming the identity of someone senior or trustworthy at that company to glean sensitive information.
Phishing scams are estimated to cost U.S. businesses alone $500 million each year, which is one of the reasons why cybersecurity startups have been so ripe for investment in recent times. Earlier this year, PhishMe — a startup that provides tools and services to help employees recognize malicious phishing emails — was acquired for $400 million by a private equity consortium. Big technology firms including Amazon and Microsoft have been investing heavily in various cybersecurity initiatives too.
“Valimail’s technology represents the perfect convergence of a huge need, a rapidly growing market, and a revolutionary technology led by an experienced, disciplined team,” noted Tenaya Capital managing director Brian Melton. “Valimail’s automation platform is a best-in-class solution that’s already found a substantial market and widespread recognition for its technical superiority. It will have wide application in the years to come.”
Valimail launched out of stealth with $1.5 million in funding in 2016, and in the intervening years it raised around $15 million in total. With another $25 million in the bank, the company plans to grow its platform outside the U.S. and go on a hiring spree across engineering, sales, customer service, and marketing.
“Valimail was founded to bring trust to the world’s communications, starting with email,” added Valimail cofounder and CEO Alexander García-Tobar. “In a world of first-generation solutions with failure rates over 70 percent, we believed total automation was a necessary approach. The past three years have proven our thesis that the market both needs and values automated authentication. Now we’re prepared to make our platform available worldwide.”