Over 90% of cybercrime activities that lead to financial fraud or identity theft start with an email impersonation, commonly known as phishing and spoofing. Several platforms offer individuals and businesses email protection from such attacks and general email impersonation — and Sendmarc, based in Johannesburg but with global clients — has raised $7 million in Series A funding.
The startup was launched by CEO Sam Hutchinson, Keith Thompson and Sacha Matulovich in 2020 off the back of selling their former startup: a communication platform that allowed businesses to send, deliver and track email and SMS communications. With Sendmarc, they sought to solve email impersonation issues their former clients faced, thereby making the internet safer for their new customers.
Companies have lost over $10 billion due to business email compromises globally. Sendmarc helps its customers solve this problem by locking down their email domains and monitoring for attempted abuse. According to chief strategy officer Matulovich, the company’s tech is based on email authentication methods, such as the Sender Policy Framework (SPF) and the Domain-based Message Authentication, Reporting, and Conformance (DMARC), global email security standards that protect domains against spoofing and that are used by companies such as Google, Microsoft, Meta, LinkedIn, and PayPal. Sendmarc says its subscribers have access to these same tools that implement, monitor and maintain these global email and domain security practices.
“There’s a global standard designed by a consortium of the world’s largest tech companies. Every domain owner has to implement the standard, but it’s difficult to do so,” Matulovich told TechCrunch in an interview. “It’s not something you can switch on in your Microsoft or Google. So we’ve built software enabling businesses to access these protocols to stop their emails from being impersonated.”
As an African startup building a global product, Sendmarc’s main competitors are outside the continent. Matulovich asserts that though the startup is going head-to-head with mostly older companies such as Agari, the market is grossly underserved because there are a million businesses whose safety needs are yet to be met. In contrast, companies serve hundreds of thousands at best.
“What we do differently, unlike our competitors, is that we have built a product focusing on go-to-market features. Let’s use this example: say you devised a vaccine to solve a virus. Everyone agrees it works. And now there are, let’s say, ten vaccine manufacturers. The problem isn’t the vaccine manufacturing; it is the distribution to millions who need it,” said the CSO.
“So while we focus very much on our software, which is our vaccine, we also focus very much on the distribution problem. The other half of our software is built around the sales and go-to-market tools that support all our partners worldwide who help distribute the product because it’s a volume game.” He adds that Sendmarc plans to serve up to 100,000 customers in the next five years as the company might expand its product suite to include other impersonation protection features.
So far, it has 1,000+ paying customers. Among them are South African stock exchanges, law firms such as Bowmans, insurance companies, tech startups, banks, and law enforcement agencies across North America, Europe, Australia, South Africa, and Latin America. Eighty percent of them are based in South Africa, while the rest are spread globally, Matulovich noted. These clients pay subscription fees between $49 and $119 monthly, depending on the company size, thus generating over $2 million in ARR for the two-year-old startup since 2021.
Atlantica Ventures led Sendmarc’s Series A round. It welcomed participation from Allan Gray, E-Squared Ventures, Fireball Capital, Endeavor Catalyst, 4Di Capital, Endeavor Harvest, Alpha Private Capital, and Kalon Venture Partners, the Johannesburg-based investor that provided Sendmarc with its seed funding in 2020. Sendmarc has raised $8.5 million since its inception.
The South African startup, which has offices in the Netherlands, Argentina, and Canada, intends to use the investment to increase its sales team across Africa, the U.S., Europe and Latin America, according to Matulovich. And as cybercrime continues to rise, Sendmarc says it wants its dedication to email and domain security to play a critical role in protecting companies and users from the harmful effects of email impersonation across these markets.
“Cybercrime has become a major disruptor of economic activity both in Africa and worldwide, which costs companies and governments billions of dollars annually in financial loss and reputational impact,” said Aniko Szigetvari, Atlantica principle and co-founder who now joins the Sendmarc board. “Atlantica Ventures is supporting African digital security startups and solutions that address this growing issue or pain point. The Sendmarc team is focused on a key area of cybersecurity — email and domain security protection. We are excited to back an exceptional founding team to further support the growth of their product and geographic expansion.”