Risk Ledger – £2.1m Seed round fundraising
Last year, Risk Ledger announced £2.1m Seed round funding that will help to build out a new platform that will revolutionise supply chain risk management. The investors include Lifeline Ventures, Seedcamp, firstminute Capital, Episode 1 and Village Global.
Risk Ledger was founded in 2018 by Haydn Brooks and Daniel Saul, with a mission to shift the way organisations approach cybersecurity and information management in the supply chain. The company grew exponentially with revenues up 300% since it began the commercial roll-out of its platform in January 2020 and was identified two years ago as one to watch in Forbes’ 30 Under 30 report.
We interviewed Haydn Brooks, CEO and Co-founder of Risk Ledger who shared with us their vision, experience when fundraising in the early stage, and advice for Founders entering early-stage fundraising and beyond.
What’s the story to you founding Risk Ledger?
Before founding Risk Ledger I was a cyber security consultant at KPMG and then Deloitte, where I specialised in helping clients understand how secure their supply chains were. Whilst doing this I had an idea for a product that could help ease a lot of the pain my clients’ were having in assessing their suppliers’ security and after testing the idea with a few friends decided to take the plunge and build it. This was back in April of 2018, since then we have raised £3.5m and have gone on to win over 50 enterprise and public sector customers. We have over 5000 users on our platform spread across over 2200 organisations.
What is your vision for Risk Ledger?
Risk Ledger’s mission, the reason we were founded, was to stop supply chain cyber attacks from being successful. Currently over two-thirds of all successful cyber attacks involve a third party supplier, and security teams currently aren’t armed with an effective toolset to prevent them.
Risk Ledger will become the first global network of connected organisations all working together to defend-as-one, detecting, responding and ultimately preventing cyberattacks, continuously and in real-time.
How did you go about raising your Seed round?
The first round we raised was a £370k round that was led by Seedcamp, a pre-seed venture capital fund. We were also supported by some great angel investors, Village Global (a VC fund in California) and Episode 1 Ventures (a VC fund in London). This round started to come together through me pitching the idea to as many people as I could, initially to collect feedback, and through some contacts I made whilst taking part in the CyLon startup accelerator I met some venture capitalists. A few of my friends and ex-colleagues who heard the pitch immediately asked to invest, and from there we started getting interest from the VCs. The second round we raised was for £1m and that was led by Firstminute Capital, another VC based in London. This round was actually done out of cycle as I got to know one of the investment team there, and they were impressed with our progress to date.
Our Seed round which closed in July 2021 was led by Lifeline Ventures, a VC fund in Finland. This round was based on the growth and success we had seen since launching the platform in January 2020, and we chose Lifeline due to their track record in building great businesses that make a real impact in the industries they operate in. Having Lifeline on board has been transformational for my cofounder and me and has helped to really drive growth in the company.
What are the main obstacles when raising money in Seed-round, especially in Cyber?
The biggest obstacle we found was firstly proving traction and growth in a crowded market. The number of companies in the cyber industry has exploded over the past 5 years and as such you really have to be able to differentiate yourself from other companies in the sector if you want to win investment from great investors. The second obstacle was finding a clear, concise, and digestible way to tell your story. Typically cyber companies are predicated on very technical visions, and the investors you are pitching to typically don’t come from a technical background. You, therefore, have to find a way to convey your vision to the audience in a way that they not only understand but they get excited by. This can also be hard if you are a more technical founder as it involves constantly pitching your company to as many people as possible (not just investors) and learning what works and what doesn’t!
How have Finerva supported Risk Ledger to date?
Finerva have been our accountants through the whole journey. What has been special has been the way the Finerva team has not only delivered our accounting service but have also taken the time out to help me as a Founder understand the different facets of accounting and financial control, and have been there to answer any questions and help guide me when needed. They have been much more than just an accounting firm but truly an outsourced CFO function.
What’s your top advice for founders thinking about a Seed round in 2022?
2022 will be an interesting year as we have just had a long period of a bull market, with investment rounds and valuations climbing higher and higher. Some investors are predicting the investment landscape will change this year in response to that and the economical environment and so it may get slightly tougher to raise.
At the end of the day the advice I would give regardless of the investment landscape is to speak and pitch to as many people as possible and ask for their feedback on your pitch. Good investors love to give feedback and they love to see founders learn, and by learning what pieces of the puzzle you are missing you can iterate your pitch until you win the investment round. The other piece of advice would be to spend all of your time obsessing over your product and your customers. If you are building a great product and winning great customers then you won’t have to go out and win investors, the investors will be throwing money at you to be a part of your journey.