The company declined to comment on the valuation, but co-founder and CEO Rami Essaid was willing to discuss some of the other details. For one thing, he said that Foundry Group “shot us down” twice over the past couple of years before Distil’s growth convinced the firm to lead the Series A (along with Techstars’ Bullet Time Ventures).
Essaid also said that he’d set out initially to raise $7 million, and even when raising a $10 million round had to turn some VCs down. So why go with Foundry? Was it all those previous “no”s? Actually, according to Essaid, it was because the firm shared Distil’s vision.
“Some of the VCs that we talked to were focused on how we make more money doing the same thing,” he said. “Foundry looked beyond what we’re doing today and asked, how do we become a bigger, more holistic security company?”
Right now, that means building a comprehensive solution to battle online bots, rather than focusing on the individual problems that bots can cause. For example, Essaid said that when Distil works with an e-commerce company, it tackles click fraud (which would mean the company is paying for useless ad clicks), price scraping, and more: “What we try to do is bring everybody to the table. That makes the sales process harder, but it also makes [the product] stickier.”
Distil says it works with customers ranging from startups to Fortune 500 companies and has blocked 9 billion “bad bots,” with revenue growing 20 percent month over month.
As part of the funding, Ryan McInTyre of Foundry Group and David Cohen of Bullet Time and Techstars (where Distil was incubated) are joining the company’s board of directors. This suggests that Cohen was successful in his fundraising efforts for Bullet Time, which, according to a regulatory filing, was aiming for a $150 million third fund. ff Venture Capital, IDEA Fund Partners and Militello Capital also participated.
Much of the new money will go towards marketing and sales, Essaid said. Presumably that encompasses a lot more than promotional robot boxing matches at South by Southwest, but Essaid did promise, “We will get much better robots next year.”
It’s no secret that mobile — and specifically Android — is becoming a major vector for malware. The result of this, according to a new report from CAPTCHA-based advertising firm Solve Media, is that suspicious traffic from mobile devices grew 30 percent in 2013 and currently accounts for about 25 percent of all U.S. mobile traffic.
Overall, suspicious web traffic across Solve’s network increased about 40 percent over the course of 2013 and now accounts for about 61 percent of all traffic. Just because the traffic is suspicious doesn’t mean it has to be a bot, though. Solve tells me it can confirm that about 72 percent of the suspicious traffic is definitely from bots.
In Q4, the highest level of bot traffic came from Southeast Asia, China and Eastern Europe, with hotbeds in Singapore, Taiwan, Poland, Lithuania and Romania.
Solve’s data is based on looking at over 700 million CAPTCHA verifications on about 8,400 sites.
Solve Media’s CEO Ari Jacoby believes that the spike in bot traffic late in the year is in large part due to the bigger ad budgets that are being spent around the holidays. “With US advertising budgets expected to top $182B by 2015, brands and publishers must both commit to adopting fraud prevention measures now,” Jacoby said in a statement today. “Aggressive botnet operators are not only stealing marketers’ hard fought budgets, they’re also creating false results on campaign performance.”
Given that Solve protects against this kind of bot traffic, it’s always worth taking the actual numbers with a grain of salt and the sites that use its system may be more prone to being attacked than a regular website, which may skew its data, too. Overall, though, the numbers in this report seem to track what we’ve heard from other companies.