Cyberattackers Expand Targets to Small and Medium Businesses, $100M Raised by Security Startup Coro

For years, cybersecurity has been a major concern for large enterprises, but new tactics and the rise of AI have now made small and medium businesses a prime target for cybercriminals.
With its recurring revenues skyrocketing 300% in the past year, New York-based startup Coro, which builds tools specifically for smaller businesses, has secured a significant $100 million in Series D funding. Sources familiar with the deal state that the startup’s valuation has now surpassed $750 million post-money.

While Coro has primarily focused on the expansive U.S. market, the company plans to use this round of funding to expand internationally, starting with Europe. It’s worth noting that the lead investor in this round is UK-based tech firm, One Peak, known for its focus on enterprise technology. Existing investors Energy Impact Partners and Balderton Capital are also participating in the funding round.

One of Coro’s objectives with this fresh injection of funds is to further advance its research and development efforts, specifically in the realm of AI. By incorporating more advanced AI tools into its all-in-one platform, Coro aims to surpass the capabilities of even the most sophisticated malicious hackers.

In fact, IBM has predicted that the average cost of a data breach by 2023 will reach a staggering $4.45 million. While cyberattacks targeting large organizations may grab the most headlines, studies show that cybercriminals are increasingly shifting their focus to SMBs. By taking advantage of the law of economies of scale and capitalizing on the dominance of SaaS in the enterprise world, attackers are able to maximize their profits.

“The barrier of entry for attackers has significantly decreased in the last two years,” explains Dror Liwer, co-founder and CMO of Coro, in an interview. He points to the emergence of attack-as-a-service techniques, specifically ransomware-as-a-service, as a major contributing factor.

Liwer goes on to elaborate, “In the past, executing a sophisticated attack required a high level of expertise and was quite costly. Today, individuals can visit a website, upload a list, and essentially rent an attack to target a desired market. This decrease in the cost of attack has greatly improved the ROI for targeting SMBs, as it is now much more affordable than before.”

According to Liwer, in the past, gaining a list of 100,000 would have cost around $1 million due to the high payout. Now, these lists can be acquired for as little as $50,000, making the return on investment even more enticing for cybercriminals.

These statistics are certainly felt by startups like Coro, with a staggering 73% of small businesses reporting security incidents last year, according to Tripwire’s research. Furthermore, a survey conducted by Digital Ocean revealed that 74% of SMBs consider data privacy a top concern.

The security market for SMBs is prime for the taking, as these businesses often lack the resources and internal IT budgets to effectively build and manage their defense systems. Coro has identified this opportunity and has created a comprehensive, all-in-one platform to cover all potential points of entry for cybercriminals, including email protection, endpoint protection, and cloud protection. This market, however, is highly competitive, with players ranging from large providers like CrowdStrike to newer startups such as CyberSmart and Guardz.

Despite the competition, Coro has been experiencing significant growth in the mid-market sector (50-2,000 employees) through the use of channel partners like ISPs. This growth has caught the attention of investors.

“As a growth investor, we look for companies that target large, underserved markets and are in prime position to dominate that field,” states David Klein, co-founder and managing partner of One Peak, in a statement. “Coro has already achieved phenomenal growth and success in the SME market. We are convinced that Coro has the right tech stack, a world-class management team, and unlimited potential to scale the business to the next level. We’re excited to partner with Coro to help them execute on their vision and support the team in their next leg of explosive growth.”

For context, Coro’s valuation has steadily increased on a yearly basis. Last year, in April 2023, the company raised $75 million at a $575 million valuation (also post-money).

With the current state of the startup landscape, where many are struggling to secure funding, Coro’s success is particularly noteworthy. The company originally made its mark as CoroNet on the Disrupt Battlefield stage. Now, with this latest round of funding, Coro is well on its way to scaling internationally and continuing to protect small and medium businesses from the growing threat of cyberattacks.