Digital Shadows

Year founded 2011
HQ Location London
Sector Technology
Staff count 166
Capital Raised £36.4m
Digital Shadows willingness to raise capital has helped it secure more than £32m of equity over four years, driving its ambition to make the internet safer.
Many companies raise capital because they need more fuel in the tank. We wanted to raise to add more fuel to the fire.

James Chappell

Co-founder & chief innovation officer

Winning investment validation

The internet age offers enormous opportunities, but digital risks are a very real threat. Co-founder and chief innovation officer James Chappell and his co-founder Alistair Paterson had a “hunch” that digital footprints would play an important role. So, they set up Digital Shadows to help companies manage digital risk and digital security.

Digital Shadows has raised $46m (£32.6m) over four main equity funding rounds following seed investment. Its investors include Octopus Ventures, Passion Capital, Storm Ventures, Trinity, TEN/11, Industry Ventures, Paladin Capital and World Innovation Labs.

“Ultimately we made a bet – we had a theory of how security would evolve,” says Chappell. With a stellar roster of VCs backing the company, “it really helps validate we are heading in the right direction”, he says.

Combatting viral impact

Digital Shadows entered a high-potential industry that Chappell believes is impacting every business across the globe.

When reading the news you can’t fail to see cyber security – it’s definitely a top issue.

James Chappell, Digital Shadows

Chappell explains that at first it took a while to convince clients and investors this threat should be a priority. But due to numerous high-profile attacks, including various hacking examples in the NHS, digital security is top of the agenda. “Digital Shadows is now pushing on an open door, as security teams really understand the challenge,” says Chappell.

Connections count

Having both worked in the security industry for over 15 years, Chappell and Paterson started the business with great connections and vast amounts of industry knowledge.

They had worked on high-profile consultancy jobs, including helping the Bank of England with its regulatory framework for cyber security.

“Our industry experience provided credibility and won work, and through this work we can make a compelling case to investors,” Chappell explains. This, he believes, has “shaped a viable and credible business model”.

Driving product innovation

Chappell says that although his business is “relatively unique”, Digital Shadows must work to fit as part of a complex ecosystem of over 5,000 security products. He believes being part of a network is essential to make sure the business remains “relevant and connected”.

He references Accenture’s London Fintech innovation lab programme as being an important networking platform for the business. Here he made a number of high-profile industry connections who were essential for early product experimentation and iteration. They also connected Chappell to early clients.


Aiming for profitability

Being capital-ready has helped the business generate healthy revenues. “The evidence has always been there to suggest this was going very well,” explains Chappell. He believes this is primarily how Digital Shadows has continued to be so attractive when raising investment.

Digital Shadows is using a recent £18.4m ($26m) investment round to push the company further towards profitability. “Many companies raise capital because they need more fuel in the tank,” explains Chappell. “We wanted to raise more to add more fuel to the fire.”

Expanding into Asia, the EU and the US, Chappell believes the company has a strong profile in the web security sector, which “more than justifies” the large amounts of investment the company has received.

Key Metrics


Revenue increase


continents served


VC investments rounds

Sources of capital
Supported By
Government Support
  • Enterprise Investment Scheme
  • Innovate UK

Related Stories

The Intern Group
The Intern Group began in 2011 with three friends who arranged for a dozen volunteers to work at the Under-20 World Cup in Colombia, scaling up to become a £10m cashflow-funded business. Read more...
The Lakes Distillery
When entrepreneurs Paul Currie and Gary Thornton with a vision for a world-class whisky distillery in Cumbria met expert retailer Nigel Mills, the scene was set to create a retail and export business, and award-winning tourist destination Read more...
Cranberry Panda
E-commerce recruitment agency Cranberry Panda’s founder and chief panda Jonathan Hall attributes his company’s rapid scale-up success to investing in the company’s vital human capital. Read more...
Earth Immo
Founder and CEO Dan Johnson is scaling his real estate marketing business with intellectual and human capital, and despite the financial crisis denting his funding confidence he plans to raise more funds to expand into new markets. Read more...
Bloom & Wild
Bloom & Wild’s technology focus has helped the company flourish to become a UK “top-rated” flower delivery service, but developing a world-class tech platform can be a thorny process. Read more...
Redington’s co-founders, Robert Gardner and Dawid Konotey-Ahulu have been deploying a fine blend of social, intellectual and financial capital to drive the consultant’s goal to help make 100m people financially secure. Read more...