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

Offering a fresh and flexible approach to SME finance with invoice factoring, GapCap’s scale-up journey is fuelled by a combination of private debt supply, technology and data. Read more...
Renal Services
The UK’s first privately operated independent chain of kidney dialysis clinics Renal Services was one of BGF’s earliest investments and was chosen as one of the 1000 Companies to inspire Britain 2017. Read more...
Laurencekirk-based Blaze Manufacturing Solutions is a true Scottish offshore oil and gas industry success story, but co-founder Ann Johnson says there were turbulent times when the family business could have collapsed. Read more...
The Goat Agency
Creating a culture of excellence, innovation and fun is paramount for influencer marketing specialist The Goat Agency, helping the company to scale its headcount from four to 85 in just two years. Read more...
BBOXX's highly scalable solar-powered battery power utilities for people in the developing world have boosted the company’s revenue to $28m, proving that positive social impact can also be a great investment. Read more...
Diamond Logistics
Founder Kate Lester had a “Kodak moment” five years ago to scale up her business after collapses in the same-day courier market made her realise her business would “become extinct”. Read more...