VPN maker Nord Security nets $100mn in funding led by Warburg Pincus

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Nord Security, which makes a leading virtual private network, has nearly doubled its valuation in a year to $3bn after raising funds from a US private equity group as the cyber security software provider taps growing demand for online safety.

The $100mn funding led by Warburg Pincus provides the Lithuanian technology group financial clout to expand its product range and buy other companies, said Tom Okman, its co-chief executive.

The significant financing suggests Nord Security is an outlier compared with other technology companies that have dropped in value over the past year amid a broader slowdown in venture capital markets.

Nord, which was founded in 2012 and operates in the US, UK, Canada, Australia and Germany among other markets, could eventually pursue an initial public offering, Okman said this week.

The Vilnius-headquartered group’s popular NordVPN enables internet users to protect their online identity. The company also offers tools such as password management and file sharing.

“General awareness of security and privacy products really helped to boost our growth and numbers,” Okman told the Financial Times. “We’ll be able to fuel that growth even further.”

New York-based Warburg Pincus, with more than $83bn in assets under management, will gain a board seat as part of the deal. The buyout group has backed cyber security companies such as CrowdStrike in the past.

Nord has benefited as spending on cyber security and risk management has climbed in recent years. A shift in habits such as home-based working and a rise in demand for cloud-based software prompted research group Gartner to predict an 11 per cent spending rise globally to $188bn for 2023.

The group operates profitably while the majority of its sales come from consumers and small businesses, Okman said, but declined to share financial details for the company.

“Now there are lots of strategic opportunities open for us, for both organic and inorganic growth,” Okman added. Warburg is a “top-tier partner that can support us in the next stage”, he said.

The latest funding adds to Nord’s first external round last year when it netted $100mn from investors led by Novator, which has backed food delivery company Deliveroo and online car seller Cazoo.

Nord has led recent consolidation in the sector with last year’s purchase of Surfshark, which also offers a VPN, while two years ago the UK-listed digital privacy company Kape bought ExpressVPN from its founders for $936mn in cash and shares.