'Freemium' antivirus firm Avast gets funding boost

Summary:The private equity firm Summit Partners has acquired a minority stake in Avast through a $100m investment in the antivirus company

The security vendor Avast has received a $100m investment from private equity firm Summit Partners, in exchange for a minority stake in the company.

Avast chief executive Vince Steckler described the $100m (£64m) deal on Monday as "a vote of confidence in our disruptive 'freemium' business model", which sees the vendor giving its product — including updates — for free to millions of non-corporate users.

The company's current model is based around providing its antivirus program, which contains similar features to competitors' paid-for offerings, to home users for free. As with rival antivirus firm AVG, this is done in the hope that those customers will then upgrade to a paid-for premium version.

Avast also provides a number of business-tailored products that attract an annual subscription fee in exchange for security features. The firm's freemium model has already netted the security specialist approximately 100 million registered subscribers, according to a statement from the company.

"[This approach] is already upsetting the traditional antivirus market," said Steckler. "Instead of paying for advertising or installation on new computers, Avast continues to experience dramatic growth as fans of Avast recommend our products to their friends. Freemium is the wave of the future... We have no plans to change our approach and conform to the classic retail positioning model."

As part of Monday's deal, Scott Collins, managing director of Summit Partners, will get a seat on Avast's board of directors. ZDNet UK asked Avast how big Summit Partners' minority stake was, but the company would not divulge this information.

Topics: Tech Industry

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