Due Diligence Consulting: Insights for Investing in Dark Web Firms

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In today’s digital world, data is one of a company’s most valuable assets, making cyber attacks one of the most significant business threats. At Apex Leaders, we recognize that due diligence consulting is critical to evaluating these risks effectively, particularly when considering investments in high-stakes industries like cybersecurity. An attack can result in costly data breaches, legal liabilities, regulatory fines, and irreversible damage to a company’s reputation. The darknet, or dark web, is the primary location for advertising, buying, and selling stolen and hacked data and a forum for the anonymous exchange of threat information.

Our client’s thesis was that as more enterprises adopt cloud platforms and become increasingly exposed to external breaches, having a solution that provides timely access to threat data on the darknet will be paramount to mitigating the risk and effects of a cyber attack. They came to the Apex Leaders team for due diligence services to validate their thesis and aid in evaluating an investment in a leading provider in the industry.

Demystifying the Dark Web Cybersecurity Market

A complete understanding of the target company, the angles to be explored, and the expertise required are essential to the private equity due diligence process. Our due diligence consulting process started with a thorough intake call to gain clarity on the insights needed to make an investment decision confidently.

During our conversation with the investment team, we learned that very few cybersecurity providers focus exclusively on the dark web; and only a handful of firms, including the target company, monitor the darknet using machine-learning and archival tools. Together we identified the primary areas our client needed clarity on before pursuing the target company, including:

• The total addressable market for a cybersecurity partner focused on deep web intel
• Competitive landscape
• Catalysts and key buying considerations of consumers
• Validation of the target’s value proposition and opportunities for future growth

Our client wanted to speak with industry experts and formers of competing providers that could shed light on these essential investment considerations.

Exact Match Expertise for a Winning Investment in Darknet Data Provider

Identifying precise-fit industry experts is essential to the pe due diligence process. Our team conducted custom research, recruiting, and vetting to successfully connect the client with advisors from four competitor firms to provide custom-fit due diligence consulting.

• Vice President of Sales | Webhose.io
• CEO | RepKnight
• CMO | Digital Shadows
• Director | CrowdStrike

After speaking with these advisors, the client wanted to know more about the added value the target company provides to end customers and whether there are opportunities to sell dark web data solutions to smaller companies.

Through exhaustive research, we discovered that Arizona State University had conducted significant on the dark web. We connected our client with one of the professors that had led the research initiative, published extensively on the findings, and founded a relevant cybersecurity startup.