Information on the Target

We are pleased to announce our recent investment in Hdiv, a promising cybersecurity startup based in San Sebastián, Spain. Hdiv specializes in providing an array of application security products designed to protect and detect threats targeting web applications and APIs. The company is led by CEO Roberto Velasco and supported by a dedicated team, including co-founders Gorka Vicente (COO) and Gotzon Illaramendi (Software Engineer). We are eager to collaborate with them on their journey towards enhanced cybersecurity.

Industry Overview in Spain

The rapid expansion of web applications in recent years can be attributed to the increased adoption of mobile technology, enhanced computing power, and advancements in cloud infrastructure. However, this growth has coincided with a critical shortage of cybersecurity professionals, compelling developers to rely on third-party solutions to safeguard web applications and APIs.

As the number of applications continues to rise, so does the incidence of cyber threats posed by malicious actors targeting users and businesses alike. According to Whitehat's Application Security Statistics Report, 30% of total breaches reported in 2017 were linked to web applications, marking the highest figure on record.

Many development teams tend to regard security as an afterthought, often implemented only after the design and build phases of a project. Once deployed, web applications generally rely on external firewalls for protection. While these firewalls aim to block harmful traffic, they also risk obstructing legitimate users and generating excessive false alerts, which creates significant challenges for security teams striving to address these notifications while maintaining speedy product releases.

The Rationale Behind the Deal

Hdiv presents a unique solution to the existing challenges in web application security. By offering a suite of tools that can be integrated during the design and development phases, Hdiv allows developers to monitor applications from within, alerting them to potential vulnerabilities in real time. This proactive approach to security not only enhances the overall protection of web applications but also fosters the adoption of DevSecOps methodologies.

Moreover, Hdiv's portfolio unifies protection (Runtime Application Self-Protection, or RASP) and detection (Interactive Application Security Testing, or IAST) capabilities into a single solution that is compatible with all major developer platforms. With Hdiv’s tools, developers can significantly reduce the time spent on manual penetration testing, optimizing both security measures and productivity.

Information About the Investor

Adara has a strong track record of investing in innovative technology solutions, particularly in the realm of cybersecurity. Hdiv marks our 13th investment from our second fund, and it follows closely on the heels of our successful investment in AlienVault, which became the largest tech exit by a Spanish company when it was sold to AT&T. Adara’s commitment to fostering growth in the cybersecurity sector reflects our belief in its potential and the critical need for effective security solutions in today’s digital environment.

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Our assessment indicates that Hdiv could be an excellent investment opportunity, given its innovative approach to web application security. By integrating security measures during the design phase, the company directly addresses a prevailing issue for developers, aligning with an industry trend that emphasizes the need for security at every stage of the software development lifecycle.

The fact that Hdiv has achieved a solid user base with minimal marketing efforts further underscores its value proposition. With an average of 500 downloads of its community version per month and endorsements from over 10,000 developers, including several Fortune 500 companies, Hdiv exhibits strong market traction.

Moreover, as organizations increasingly prioritize cybersecurity in their operational strategies, Hdiv stands to benefit substantially from the growing demand for robust security solutions. At recent estimates, developers spend around 17 hours a week resolving maintenance issues and addressing bad code, translating to significant productivity losses. Hdiv's suite of tools is positioned to alleviate these pain points.

In conclusion, we believe that Hdiv is poised for long-term success and can establish a lasting presence within enterprises' software ecosystems, making this investment a potentially lucrative opportunity for Adara.

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