AnchorFree, the company that makes the popular Hotspot Shield virtual private network (VPN) software, on Wednesday announced that it raised $295 million in a new funding round.
The latest funding brings the total raised by the California-based company to nearly $358 million, which represents a significant amount for a VPN services provider. These types of services have become increasingly popular following the numerous privacy-related scandals involving governments and private firms.
The round was led by media and tech investment group WndrCo with participation from Accel, 8VC, SignalFire, Green Bay Ventures and other investors and executives. Representatives of WndrCo and Accel have joined the company’s board of directors.
According to AnchorFree, the newly secured funds will be used to “further product development and market expansion and drive M&A activity.”
AnchorFree claims its products provide enterprise-level privacy and security for consumers’ mobile devices. This includes protection against ISPs and websites collecting identity data, compromised public Wi-Fi connections, phishing attacks, and malware.
The company, led by CEO and co-founder David Gorodyansky, says its products have been downloaded over 650 million times by users across 190 countries, with 250,000 new downloads each day.
AnchorFree also offers a VPN solution for small and medium-sized businesses, Hotspot Shield for Business. Its VPN technology, called Hydra, has been widely adopted by app developers and licensed by many of the world’s cybersecurity and telecoms companies.
“Anyone who accesses the Internet is vulnerable to data theft and an invasion of online privacy which has real, impactful consequences, and David and the AnchorFree team are deeply mission-driven to address this,” said WndrCo Founding Partner Sujay Jaswa.
“AnchorFree has the two most-downloaded mobile security products, including the #1 mobile VPN product, because they have the fastest most robust technology and they work for the needs of consumers, protecting against phishing, malware, and spam in addition to providing secure Internet access. This growth will only accelerate as the world’s Internet security problems continue to grow, and we look forward to supporting David and his team as they further AnchorFree’s global success in tackling this outstanding market opportunity,” Jaswa added.
AnchorFree was accused last year by the Center for Democracy & Technology (CDT), a nonprofit technology advocacy organization, of collecting user data through Hotspot Shield and sharing it with advertisers. The CDT filed a complaint with the U.S. Federal Trade Commission (FTC) over these allegations. AnchorFree has denied the accusations.
Earlier this year, a researcher disclosed the details of a vulnerability that exposed the names and locations of Hotspot Shield users. The expert made his findings public after claiming that the vendor ignored his attempts to report the flaw. A patch was released a few days later.
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Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.
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