Sydney security startup Bugcrowd gains $1.6m to help herd hackers

Sydney security startup Bugcrowd has made it through its series seed round by attracting investment from a number of investors.

Icon Venture Partners, Paladin Capital Group, Square Peg Capital, and a number of angel investors are behind a $1.6 million seed round for the fledgling company.

The company, the brainchild of Aussie entrepreneurs Casey Ellis, Sergei Belakomen and Chris Raethke, began by funnelling hackers' efforts into charitable efforts, providing not-for-profits with free penetration-testing services before moving to more commercial ventures.

Hackers doing the penetration testing also win through Bugcrowd's business model, earning money for those who can demonstrate their hacking skills or increase their reputation. Bugcrowd has even been internationally recognised as a valid means for contributing to professional qualifications, including the Certified Information Systems Security Professional (CISSP) accreditation.

The funding will go towards developing Bugcrowd's sales and marketing operations, expanding its team and supporting its community of 3,000 security testers and researchers.

Square Peg Capital partner David Liberman pointed to the startup's involvement with Startmate as one of the defining factors of Bugcrowd's success.

"Bugcrowd changed from an idea to a startup when Ellis and Belakomen were accepted into Startmate in January of this year," he said.

Startmate gained 7.5 percent equity in the company when it invested an initial AU$50,000 to get Bugcrowd on its feet.

Square Peg is also investing in Australian startup Canva, which launched this month on the back of an AU$3 million seed round.

"We're very excited to announce this funding round," Ellis said in a statement. "We greatly value the contribution made by each of our seed investors, not just for their capital, but for the expertise and connections they bring."