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DataDome, which uses AI to protect against bot-based attacks, raises $42M

Online businesses are at risk of bad bot activity, certainly more now than they used to be. According to a survey from Imperva, 42.3% of internet traffic in 2021 wasn't human, but instead bots that ran automated routines with ill intent.

Given the damage bots can do -- for example, stealing content and inventory, degrading website and app performance, taking over accounts and committing payment fraud -- it's not exactly surprising that vendors selling bot-fighting tech are attracting big investments. Case in point, DataDome, a provider of bot protection services for mobile apps, websites and APIs, has raised $42 million in a Series C round led by InfraVia Growth with participation from Elephant and ISAI.

That's an impressively high figure in light of the current macroeconomic climate. Funding for cybersecurity startups dropped by a third in 2022, falling from $22.8 billion in 2021 to $15.3 billion last year, according to Crunchbase data. Beyond the cybersecurity industry, the fallout from the Silicon Valley Bank collapse continues to impact startups' ability to secure funding.

DataDome co-founder and CEO Benjamin Fabre says that the proceeds from the Series C will be put toward supporting the company's commercial rollout and R&D efforts.

"This round brings our total raised to $82 million," Fabre told TechCrunch in an email interview. "We are fortunate to have demonstrated significant growth with very responsible cash efficiency. Truth be told, we weren’t looking to raise funds at this time. But InfraVia shares our vision of bot mitigation as the foundation for online fraud prevention, which made for a compelling case."

Fabre founded DataDome in 2015 with Fabien Grenier, a longtime business partner, after the pair made the observation that most companies weren't able to detect and block bots. They sought to build a platform that could prevent bot-based threats, but in a unique way -- one that eschewed static rules for machine learning that assesses every request to a website, mobile app or API.

DataDome isn't the only company doing this, of course. There's anti-bot startup Kasada, which helps to fight online bots using its proprietary anti-bot platform Polyform. ThreatX develops bot defense tech for APIs and web apps, while PerimeterX uses machine learning to help understand normal behavior and shut down anomalous, bot-driven behavior in an automated fashion.

So what makes DataDome different? Well, the company claims to be one of the few that analyzes each traffic request anew, in real time, using techniques like vulnerability scanning rules, device fingerprinting and behavioral analysis. The platform works with existing applications, offering features like a CAPTCHA to thwart bots. And it scales, processing more than 3 trillion data signals every day.

DataDome
DataDome

Image Credits: DataDome

"Think about recent headlines, like the Taylor Swift and Ticketmaster debacle," Fabre said. "Our customers are very clear about the pain points they experience because of this ... Our approach is transversal, and cuts across those aforementioned silos. In that regard, we think like an attacker, and evaluate each request for its intent."

On the AI and machine learning side, DataDome leverages several AI models to attempt to spot malicious bots. Once something abnormal has been detected, DataDome deploys a range of techniques, including data mining, to infer what caused the change.

Post-detection, the detection signals are stored in a database, where they can be used to improve the quality of the detection and understand what happened during an attack or to train machine learning models.

Over the past few months, DataDome's focus has been rolling out its CAPTCHA product, according to Fabre, as well as new AI models to block bot threats from CAPTCHA-solve bots and CAPTCHA farms plus improved analytics and reporting tools. Customers appear to be pleased with the trajectory; revenue doubled from October 2021.

"This is still a highly growing market," Fabre said. "In our experience, about 40% of new customers are upgrading from a web application firewall or a content delivery network's (CDN) basic protection, 30% are switching from bot specialists, and 30% are evolving from an in-house solution. In the first case, many customers choose us to augment the out-of-the-box bot management features CDNs like Cloudflare and Akamai offer."

DataDome claims to have over 300 customers in such industries as e-commerce, media, travel, ticketing, healthcare and the public sector. For those brands, the platform is protecting more than 400,000 domains for over 4,800 active users spread across the globe, according to Fabre -- from North America to Western Europe, India and Australia.

"The pandemic created a massive shift toward all things online, which in turn expanded the automated threat landscape," Fabre added. "Before, during and after the height of COVID, our solution proves essential for digital businesses."