Although they have now successfully completed three rounds of funding, starting with only a small amount of savings means the founders have prioritized profitability since the company began operations three years ago.

Pylarinos attributes this to the company’s humble and seeded (self-funded) beginnings.

“We have always been very profitable,” he reveals. “Even after our first two rounds of funding, we haven’t spent any of the capital. In today’s market, this gives you more points than before.

The Latest Profitable Tech Company

After a string of high-profile start-up failures like last year, Pakistan’s biggest startup Airlift, which previously boasted a whopping $270 million valuation, it only holds that investors will recoup their losses by giving the priority to “money in the bank” rather than expansion. Pylarinos agrees with this theory.

“[This year] was much more difficult than the previous fundraisers we did in the past,” he admits. “But there was interest because we’ve never been this traditional startup that burns huge amounts of capital or relies on the next fundraiser to last.”

So, when developing a business plan, think carefully before emphasizing growth rather than survival. For those of us who are used to reading about tech startups like Uber — which, despite being worth over $50 billion, only turned a profit in 2021 — this might be an idea. foreign.

“Just a few years ago, if you were a company that didn’t spend capital, that translated to [proof] you’re not growing fast enough,” acknowledges Pylarinos. “Yet we were growing up pretty fast, and spend less capital.

“With the current market conditions, I think we are in an ideal situation. The risk of going bankrupt in such conditions where capital is not granted is much greater.

Hack the Box team photo

That theory was proven this week with a series of high-profile tech layoffs, including Spotify. The Swedish music streaming giant announced on Monday that it would cut 6% of its 10,000 employees. The company has never made a full year net profit.

It looks like the company could learn a thing or two from Hack the Box. Writing on the company blog, Spotify CEO Daniel Ek said, “Looking back, I was too ambitious to invest before our revenue grew.”

Hack the market

Despite their conservative demeanor, the team stood still. Since Pylarinos first coded the platform in 2017, the company has grown to a team of 180 people. So how did Hack the Box become so big, if it didn’t follow in Airbnb’s footsteps in companies like Airbnb to reinvest millions into scaling?

Simply put: it’s a great product that has outperformed its rivals. The startup’s unique offering has attracted a growing army of cybersecurity experts to share techniques and methodologies for tackling the latest cyberthreats

“The only promotion or marketing I did, whatever you want to call it, was I posted a link to a Facebook group for people to start seeing,” Pylarinos explains. “He had a much better reaction than I expected.”

We’ll say. Currently, the number of Hack the Box subscribers worldwide now stands at 1.7 million, a level of organic growth that would make Mark Zuckerberg envious.

Patience makes the fund grow

One of the biggest factors that can affect fundraising success (especially during an economic downturn) is timing. It might make more sense to wait until the market outlook looks better and look to other sources of funding like small business grants.

But will putting the brakes on your business strategy affect success?

This was not the case for Hack the Box. Pylarinos describes “several attempts to raise capital in early 2022 as the market was dropping like crazy.”

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