The fastest-capitalised start-up in the country's tech history.
The global cybersecurity market continues to show strong growth, with an expected CAGR of 7.92 percent between 2024-2029, resulting in a market volume of 271.90 billion dollars by 2029. This expansion is driven by increasing awareness of data risks and stricter risk management requirements across all sectors.
In Belgium's competitive cybersecurity landscape, which includes over 100 start-ups, Ghent-based Aikido Security has emerged as the fastest-capitalised start-up in the country's tech history.
The company recently secured a record 17 million dollars from top international venture capitalists in a Series A funding round, not even two years after inception. Its investors include Singular Ventures, Notion Capital and Connect Ventures.
In recognition of their achievement, Aikido Security has won the M&A 2024 Best Venture Capital Deal – Technology award, while the latest transaction has also elevated Belgium as a worthy rival to established US and Israeli cybersecurity players, who have typically dominated the arena.
From smart seed funding to high-profile international fundraising
Aikido Security was launched in September 2022 as a developer-first software security platform by Willem Delbare, Roeland Delrue, Amber Rucker, and Felix Garriau. The founders identified a market opportunity to replace outdated, complex cybersecurity tools with more efficient solutions. Delbare, a serial entrepreneur, brought valuable experience to the table from establishing three previous SaaS companies in the HR and climate tech sectors.
Initially, the business was self-funded, but the founders went on to successfully raise 2 million euros in convertible loans in an angel round in their first year. This initial funding enabled them to build their development team, create their first software versions, kick-start marketing and achieve ISO and SOC 2 compliance. In 2023, Aikido Security secured another 5 million euros in seed funding.
The Series A round followed within months and attracted intense investor interest from both European and US venture capital funds. Law firm Clifford Chance LLP, which had advised Aikido Security since incorporation, led the transaction.
The deal rationale was to raise funds to expand Aikido Security’s velocity by hiring top talent across Europe and the US, as well as to invest in product development and go-to-market. In selecting partners, the founders prioritised strategic fit, focusing on investors who could offer the strongest combination of expertise, networks, and value.
The impressive round highlighted Aikido Security’s potential for future value creation and exponential growth. “Our journey from a smart seed funding strategy to a high-profile international fundraising round was driven by a combination of serial entrepreneurship with targeted capital, allowing our founders to maintain control while driving rapid global expansion, says co-founder Roeland Delrue.
Clifford Chance LLP also motivated Aikido Security’s M&A nomination. Roeland believes their second capital round, combined with the Series A round, was factored into the win. “The deal was substantial, but I also believe we won due to the succession of the rounds and the speed at which everything happened.”
A product fit for market
Growing social digitisation and global use of open-source software have created an increased demand for cybersecurity beyond traditional enterprise clients. "The days of it being the preserve of the big banks, telcos, and Fortune 500 companies are over", says Delrue. However, small businesses face significant challenges in accessing appropriate security solutions.
“If you have a super-small software start-up, whether you're a fintech dealing with financial data, an HR tech dealing with salary information or a health tech dealing with patient data, and even if you're a two-person company, you still need security. So, you start looking for these products but can only find enterprise products.”
He explains the laborious process that small companies must undergo, including multiple sales meetings, waiting for demos, or conducting a proof of concept that must be paid for, only to be presented with an exceptionally costly quote.
“That's typically how the enterprise world works, so you end up with a product that needs trained personnel to work with the software. It’s not a problem if you're a massive company with a 100-million-dollar budget a year as you can hire a small army of security engineers, but it’s impossible if you're a small company.”
Roeland Delrue, Co-founder at Aikido accepts the award from the evening's host, Xavier Taveirne
Aikido Security addresses these pain points and bypasses lengthy sales talks with a freemium and product-led strategy, allowing anyone to create a free account and use their products. “The product is especially user-developer-friendly compared to many on the market which make you feel as if you need a PhD in cybersecurity to understand what's going on”, says Delrue.
The company also validates results to minimise false positives. “It's like a disease in the industry, and when you're a small company, you don't have the time or resources to address this issue. Additionally, we combine multiple security products like code-, cloud-, web-scanning and API security into a single product, eliminating the need for multiple solutions.”
The company quickly became a strong player in the non-enterprise market due to the uptake from their customers, reaching a point where expansion of their sales and marketing teams became crucial. “We're a very product-heavy company. Half of our payroll is for software engineers, compared to other security vendors that are 70 or 80 percent marketers. We wanted more visibility, but talent acquisition is expensive. While we were aware that raising a Series A round requires huge ambition and a promise to deliver in terms of growth and revenue, we seemed to be on that trajectory. And we remain on that trajectory, so it appears we've made the right decision”, says the co-founder of Aikido Security.
Attracting top-tier investors
By the time Aikido was considering a Series A funding round, the company’s growth and activities in the marketplace had already caught the attention of top-tier venture capitalists, Delrue says.
“We were a start-up that came out of the gates raising two million euros pre-product and pre-revenue. They followed our journey and saw that we worked hard, our product became competitive, and we grew quickly. Because we've always been focused on progress, I think the rest follows. If you focus too much on fundraising and talking to the VCs, you're not building the company. We turned the tables a bit and they started to come to us more than we were going to them. This is always a really good situation to be in.”
The Series A round is the first round where the focus is about more than just the founders and the idea, explains Delrue. “VCs will only invest if they can see a growth trajectory. The figures around your growth and the total addressable markets become the most important factors in determining the valuation of the company rather than its revenue.”
The VCs introduced Aikido Security to many of their portfolio companies, but Roeland explains they were eager to return to building their products. “We weren’t looking for a long fundraising round; we wanted a quick clean round. Some founders take two months to speak to many VCs before they land the term sheets; some will play off multiple term sheets against each other. In our case, there was a surprising lack of challenges. Hiccups tend to occur when the company setup is a lot more complex or there is much more legacy. It took only two or three weeks of high-level negotiating to get the term sheet and to sign it. From that point to the closing of the round, it was about two and a half months, which is relatively quick.”
While there were no milestones to be met or deliverables linked to the funding, Delrue says the company holds itself accountable to industry standards and periodically compares itself to competitors to assess its progress.
He points out that all of the company’s capital rounds were straightforward due to the simplicity of Aikido and the fact it is still in the early stages of its journey. “We have one office, no subsidiaries in foreign countries, one product with multiple packages, and only one type of revenue, so it was very easy to conduct due diligence on our company. We also did a good job of keeping the data clean and available so we could move very quickly when we got to that stage. A tier A investor also understands that if they put too many terms and conditions on a round, it may detract future investors.”
Lessons from the Series A round
Despite over a decade in the software industry and previous experience with owning a small company and with capital rounds, Delrue says the Series A process offered valuable new insights. "This was the first time I've had a front-row seat to different types of negotiations and dynamics. Understanding the VC perspective was among the most valuable lessons – how they think, what metrics matter to them, and what you need to demonstrate to have those conversations.
“Also, it is better to negotiate with multiple VCs for leverage, especially if you're convinced that the price should be higher, or the terms more friendly.” Additionally, Delrue points out the importance of ensuring a well-organised data room containing a company’s crucial documentation, such as bank statements, customer and employee information, insurance policies and licenses.
Delrue says they discovered the value of working with straight-shooting VCs, founders, and lawyers who appreciated urgency and avoided getting bogged down in small details. “Other factors that led to our success were our previous clean deals. Fortunately, those VCs had not attached unnecessary terms and conditions.” He says staying focused from the outset was another factor that worked in their favour. “Often, start-ups pivot – they launch with one product or service and then change to another, making it more difficult to determine real revenue. But we set out to build this security product, we stayed with it, and this made our revenue validation straightforward.”
An ambitious company culture
The Aikido culture is centred on keeping things simple and moving forward, with minimal meetings and flat hierarchies. “The founders are the only managers, and everyone is an individual contributor with a job to do”, says Delrue. This approach has created a highly collaborative environment where employees work closely together. The number of staff has also risen to 50 and continues to grow.
Aikido is not shy about its ambitions, openly targeting unicorn status, and as such, maintains a performance-driven culture focused on execution and impact. “This is not the sexiest culture to sell”, Delrue admits; however, the company boasts high employee satisfaction and retention, as team members see their work directly impacting its success. It’s not all work, though; the company also offers team trips and fun activities. “But we’re quite mature for a start-up. We know what we want to do and where we want to get to.” This ethos has attracted experienced professionals who align with the company’s vision.
Delrue says he is grateful for the dedication and loyalty of the entire Aikido team. “We work with incredibly talented people who could choose to work anywhere, so their decision to trust in our leadership and build this company together is the greatest gift. None of our success would have been possible without their hard work and commitment.” He says the company is also indebted to their first customers, who took a leap of faith.
Looking ahead, Aikido Security aims to continue to triple its growth and revenue while expanding its sales and marketing efforts. “If we stay on such a high growth trajectory, we’ll be able to keep our investors happy”, says Delrue. “Will there be another capital round in the future? Maybe. But the focus now is on doubling down on the growth and channels, building more, and expanding the product to address a wider market to accelerate even further.”
Today, Aikido’s largest country in terms of revenue and customers is the US, closely followed by Europe. Delrue says he is excited by the progress in the security industry in both Belgium and Ghent and that Aikido is a part of it. “There's a certain maturity now in the Ghent ecosystem, which is great to see, and the city is really punching above its weight”, he concludes.
Read also: A smart exit, worth a smile – How Smile Invest won Best Mid Cap Private Equity Exit 2024
