Can you tell us more about the deal AnchorFree closed recently?
We partnered with WNDRCO, Accel and other investors in a $295 investment to build the next generation mobile security and privacy products for the next billion users.
As privacy and security challenges grow exponentially, we believe that users and businesses need a solution for all of their security and privacy needs. WNDRCO was founded by early Dropbox and Dreamworks executives. We see major similarities between AnchorFree and Dropbox, as far as having large scale user bases and freemium business models and love the Team’s Dropbox experience.
We also have a lot of respect for the brand that Dreamworks has built and look forward to applying that knowledge and advice to AnchorFree. Accel has invested in some of the Valley’s most legendary companies and we are very excited to partner with them as we continue to provide security, privacy and Internet freedom to millions of people daily.
Why did you raise such a large sum of money?
We want to focus on aggressive market expansion, including selling Hotspot Shield for Business to businesses, and M&A. The first three companies that reached 1 billion users online were Yahoo, Google, and Facebook and all are in the business of exploiting user data, we believe the next company to reach 1 billion users online will be in the business of protecting user data, and we believe AnchorFree can be that company. To achieve that goal, we must be well capitalized.
Why do you think investors chose AnchorFree over other potential rivals?
AnchorFree’s proprietary technology has been proven in independent auditor tests by AV Test, a security and performance auditor, to be 2X faster than the open source legacy technology used by other players in the space. AnchorFree’s Hydra technology showed to be the world’s fastest VPN technology for both consumers and businesses, the most recent tests showed that Hotspot Shield for Business is 4X faster than Cisco.
AnchorFree’s technology both powers Hotspot Shield (which is a top 100 most downloaded app on both iOS and Android with 650 million downloads globally) and is used by 60% of the world’s largest security companies and a number of large telcos.
AV-Test did a follow-up report on the transparency and trust of the VPN industry and found that most VPN companies are not transparent about how they handle user data and in many cases shady VPN companies don’t even disclose where they are based, their management teams, investors, Board, etc. The study found that only three companies were actually transparent and published official transparency reports, and out of the three AnchorFree was the only company that shared no information with governments, while the others have.
We believe transparency and trust are key to choosing a security product that users and businesses can trust.
The bulk of your business is one in the B2C market. Do you have any plans to conquer the B2B VPN market?
We certainly do. We recently launched Hotspot Shield for Business (opens in new tab).
How is AnchorFree's Hydra protocol different from the others?
Hydra is a data transport protocol that accelerates the performance of data transfer over multiple channels, we have substantial intellectual property around performance acceleration with the biggest impact over long distance connections.
While other VPN protocols send traffic via slow congested channels and slow down substantially over long distance, Hydra is specifically designed to send packets with the most advanced performance acceleration and reduce congestion.
In a recent interview with the NYT, you mentioned that VPN wouldn't have protected people affected by some of the biggest privacy/data related scandals of 2018. Are you doing anything to remediate this?
In a number of recent major security and privacy breaches, Hotspot Shield played a substantial role.
For example; during the recent Krack vulnerability that found that every Wi-Fi network (even your password protected home and office Wi-Fi) are unsafe and are easily compromised by hackers, we played a major role enabling users to secure their Wi-Fi.
In March of 2017 the FCC allowed ISPs to collect and sell user data, Hotspot Shield experienced a major spike in users looking to protect themselves from ISP tracking. When Net Neutrality got repealed at the end of last year, we launched a free software development kit for any app developer to drop into their app and protect their traffic from ISPs discriminating against it or ISPs collecting user data.
We would not be able to protect users from things like Cambridge Analytica and the Equafax hack, but we are thinking about new products that will prevent tracking online. Our goal is to take control over personal data away from hackers, corporations, and governments and give it back to the people.
At a time where fewer and fewer VPN opt to give away their services and apps for free, why is Anchorfree still powering on with its free offer?
We are a mission driven company with a mission to enable secure access to the world’s information for every user on the planet.
It’s important for us to provide a basic free service to people that can’t afford to pay us and a premium service with extra features to people that can and choose to pay.
Over the last ten years during most major global events around Internet freedom and major security breaches, we’ve enabled millions of people with security, privacy and Internet freedom. For example just last month we saw 2M users download Hotspot Shield in Iraq, where the government cracked down on protestors and censored social media and news sites. Almost none of those users could afford to pay us, but we were happy to provide the service for free as part of our mission.
When running a freemium business model, we rely on a small percent of users that pay to make up most of our revenue. As 5B new users join the Internet in emerging markets and as 25B new IOT devices become connected to the web, we see a need to enable security solutions that can work for every person on the planet (whether they have the means to pay or not).