Web3 audit firm CertiK gets additional $88M financing to bolster its blockchain defense tech
CertiK, the fast-growing global Web3 and blockchain audit security company, announced today that it has raised an $88 million Series B3 financing round -- the fourth round in just nine months -- bringing the total capital raised to $230 million. This latest round of financing brings the company's valuation to $2 billion, double what it was valued just three months ago.
As it did in its previous round of financing last December, CertiK said today it will use the proceeds from the Series B3 round -- along with the revenue generated from its KYC, Skynet and Security Leaderboard services -- "for the development and operation of more innovative and data-driven security products." Insight Partners, Tiger Global and Advent International are the lead underwriters of this latest round, along with Sequoia Capital and Lightspeed Venture Partners. Goldman Sachs is also participating in the finance round.
The need to develop and operate more innovative security products is critical now. "Business is great, but the entire Web3 world is in danger," said founder and CEO Ronghui Gu in an interview with ZDNet. Gu notes that there has been more than $1 billion lost in crypto assets so far this year, nearly surpassing the $1.3 billion of crypto assets lost in all of 2021. The losses this year include four major blockchain software hacks: Ronin, a blockchain that runs the crypto game Axie Infinity at $625 million, the biggest DeFi hack to date; Wormhole, a cross-chain bridge that allows funds to be transferred from Ethereum to Solana blockchains, at $324 million; Qubit Finance's QBridge protocol, at $80 million; and blockchain infrastructure company Meter.io at $4.4 million. "It's crazy," he said.
In the past few months, the attention and rapid embrace of Web3 by users, software developers and companies have resulted in more applications being built on this third iteration of the World Wide Web. "What we have seen is surging growth, but unfortunately, this brings in huge security challenges. Web3 is unique in that the smart contracts that manage hundreds of millions of dollars are running on blockchains that are essentially worldwide computers that can't be stopped," Gu says.
Between the rapid evolution of Web3 and the multitude of more complex smart contracts running on platforms such as Ethereum, hackers, for example, are abusing misconfigurations in smart contracts to launch token rug pulls or cryptocurrency projects that are nothing more than exit scams. What's more, cross-chain bridges are much more complex than all Web3 apps seen before, Gu notes, and are easily susceptible to hacking.
So how can users in the Web3 world protect themselves from hackers, especially when transferring crypto assets between blockchains? For starters, visiting CertiK's website and selecting a project to review its security audit report. CoinMarketCap.com also displays links to CertiK audit reports (and reports from other third-party security firms) on the profile pages of cryptocurrencies. But Gu cautions that only 10% of crypto projects use third-party security services (60% of those blockchain projects use CertiK), with the remaining 90% being easy targets for hackers.
Gu says that CertiK's mission in 2022 is to make Web3 services and infrastructures more secure and available to a wider audience, including to traditional IT and financial institutions, and to be able to work more with its partners, including new additions such as Goldman Sachs. "We're Web3 enablers. We're trying to make the Web3 world more accessible to people without the concerns for cyber risk. That's the reason for this new round of funding. Our goal for 2022 is to build the most trusted data platform for the Web3 world. We hope it can be the entry point for new players and retail users who want to participate in this new industry," he said.