Hack the Bank: how cybersecurity startup Hack the Box raised £45m in a recession

Pylarinos attributes this to the company’s humble, bootstrapped beginnings. Despite having now successfully completed three funding rounds (raising a total of $70m) starting out with just a small amount of savings has meant the founders have prioritised profitability since the firm first began operating three years ago.

“We’ve always been very cost-efficient,” he reveals. “Even after our first two financing rounds, we didn’t spend any of the capital. In the current market, this gives you more points than it used to.”

The last profitable tech company

After a string of high-profile startup failures like Pakistan’s top startup Airlift last year, which previously boasted a huge valuation of $270m, it only holds that investors will recoup their losses by prioritising ‘money in the bank’ over expansion. Pylarinos concurs with this theory.

“[This year] was much harder than previous fundraisers that we did in the past,” he admits. “But there was interest because we were never this traditional startup that burns massive amounts of capital or relies on the next fundraiser to endure.”

So, when crafting a business plan, think cautiously before you emphasise growth over survival. For those of us who are used to reading about tech startups like Uber – which, despite being worth over $50bn, didn’t turn a profit until 2021 – that might be a foreign idea.

“Only a few years back, if you were a company that was not spending capital, that translated as [proof] you are not growing fast enough,” acknowledges Pylarinos. “Yet, we were growing fast enough, and spending less capital.

“With the current market conditions, I think we’re in a perfect spot. The risk of going bust in such conditions where capital is not granted, is much larger.”

Hack the Box team photo

That theory has been proved this week with a string of high-profile tech layoffs including Spotify. The Swedish music-streaming giant announced it would cut 6% of its 10,000 employees on Monday. The company has never turned a full-year net profit.

It sounds like the company could learn a thing or two from Hack the Box. Writing on the company’s blog, Spotify CEO Daniel Ek said, “in hindsight, I was too ambitious in investing ahead of…