SimSpace, a startup that creates digital replicas of organizations’ tech and networking stacks for cybersecurity training, has raised $45 million in a funding round led by L2 Point Management.
Bringing the company’s total raised to $70 million, the investment comes at an auspicious time for SimSpace, which had been entirely bootstrapped until about two years ago.
SimSpace is on its way to hitting its annual recurring revenue goal of $50 million by the end of fiscal year 2023, according to co-founder and CEO William Hutchison. And it’s expanding its private-sector customer roster, having shored up contracts with the U.S. Cyber Command, FBI and national cyber defense teams in unnamed U.S.-allied countries.
“SimSpace was chosen by the U.S. Department of Defense for the training of U.S. Cyber Command operatives as well as four out of the top five U.S. banks,” Hutchison said. “The last two years have challenged our company to find ways to address its expanding customer market, even while we’ve been in one of the most difficult financing environments in years. We’ve had to make hard decisions and to tough it out.”
SimSpace’s origins lie in U.S. Cyber Command, where Hutchison designed and led a joint tactical cyber training exercise, Cyber Flag, drawing on the expertise of tech staffer Lee Rossey at MIT’s Lincoln Lab. At the time, Rossey was working on creating cyber “training ranges” to simulate the IT production environments of companies and critical infrastructure.
In 2015, Hutchison and Rossey set up SimSpace to bring their cyber practice and testing tech — paired with an “attack library” and cyber learning content — to the private sector, as well as additional government agencies.
“With SimSpace, because training occurs outside of a company’s network, it’s possible to ‘throw the kitchen sink’ at cyber teams without breaking something in an actual production environment and disrupting vital operations,” Hutchison said. “SimSpace’s unique traffic-generation capability enables security teams to measure and adjust the efficacy, recall and precision of their security tools.”
Hutchison said that SimSpace, which has just over 200 employees today, will be able to “grow profitably” with this latest investment and expand headcount “modestly.”
L2 Point managing partner Kerstin Dittmar had this to add: “SimSpace’s high-fidelity cyber ranges have gained significant traction with leading companies and national cyber defense organizations. This financing will allow SimSpace to build on its strong momentum and continue to invest in its military-grade capabilities as the company serves an increasingly diverse and advanced customer base.”