Bugcrowd seals $6 million Series A funding round

​Australian-founded online crowdsourced security testing startup Bugcrowd is preparing for a period of rapid expansion after completing a $6 million Series A funding round led by Costanoa Venture Capital.

Costanoa Venture Capital, Rally Ventures, Paladin Capital, and Australia's Blackbird Ventures have pitched in for a $6 million Series A funding round for online crowdsourced security testing startup Bugcrowd.

The capital-raising effort, which was led by Costanoa Venture Capital, brings Bugcrowd's total investment tally to date up to $9 million. In 2013, the company received $1.6 million in seed round funding from Icon Venture Partners, Paladin Capital Group, Square Peg Capital, and others.

Bugcrowd CEO and co-founder Casey Ellis said in a blog post on March 12 that the company plans to accelerate its growth, expanding its day-to-day operations staff, including sales and marketing, while also further building its community of security researchers.

"This has certainly been an exciting time," said Ellis, who founded the company over two years ago in Sydney with CTO Chris Raethke, and advisor Sergei Belokamen.

The company, which spent much of 2013 under the guidance and support of Sydney's Startmate accelerator, operates a proprietary vulnerability reporting platform, which leverages a community of more than more than 15,000 digital security experts and would-be hackers to help companies uncover online vulnerabilities.

Bugcrowd's premise is to allow companies that are much smaller than the likes of Facebook or Google run bug bounty programs similar to those carried out by the internet giants. Facebook alone paid out $1.3 million to developers and security enthusiasts through its bug bounty program in 2014.

The company, which made the move to California's San Francisco Bay Area in late 2013 after its graduation from Startmate, claims to have run 160 programs to date for some big ticket clients including Western Union, Pinterest, Barracuda Networks, and Blackphone maker Silent Circle. It claims to have increased its security researcher community from 3,000 in 2013 to its current tally of over 15,000.

Costanoa Venture Capital partner Neill Occhiogrosso expects to see the company continue to expand rapidly as its services become increasingly in demand.

"As security continues to be a top spending priority for enterprises across the globe, the financial and operational leverage that Bugcrowd's platform enables is a highly strategic asset," said Occhiogrosso.

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