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BitSight raises $40m to expand IT security ratings software

Investors are pouring another $40 million into BitSight Technologies Inc., a Cambridge startup that analyzes Internet traffic to generate the equivalent of a credit score for a company’s risk of cybersecurity attacks.

BitSight said it plans to spend the money on hiring, expanding sales and marketing, and building or acquiring new products. The company said it has raised $95 million in private financing since its founding in 2011, with about $60 million now in the bank.

“Our founders’ vision for the company is we would be a standard in how companies assess risk from a cybersecurity standpoint, in the way that they today have standards for assessing financial risk or credit risk,” company president Tom Turner said.

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The investment is another example of the strong cybersecurity sector in the Boston area, which boasts a robust engineering talent base and a roster of experienced executives and investors.

The region serves as the headquarters of IBM’s security division, which reported about $2 billion in sales last year. Rapid7 Inc., another seller of security software, was the Massachusetts tech sector’s sole initial public offering in 2015.

BitSight blends in-house and commercially available data about publicly visible Internet traffic to look for evidence of cybersecurity vulnerabilities. The company matches those traffic patterns to lists of Internet addresses to find out whether a particular company’s computers have been targeted by malicious hackers.

For example, Turner said, BitSight can determine whether a corporate IP address is being used by a botnet, a group of computers that have been secretly converted into a spam-generating factory. It also can compile a history of a company’s IT breaches, or determine whether corporate computers are accessing illegal file-streaming or sharing sites.

BitSight customers, which include Lowe’s, Ferrari, and The Hartford, use the startup’s security ratings when they’re deciding whether to do business with another company — buying its products, making an acquisition offer, or writing an insurance contract, Turner said.

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BitSight grew sales bookings from about $2 million in 2014, when it launched its software publicly, to about $15 million last year. It hopes to double that figure this year, Turner said. The company has about 185 employees worldwide, with about 100 at its Cambridge headquarters. BitSight said it plans to hire another 100 people over the next 15 months.


Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.