From bootstrapped to billions: How Nord spent ‘hundreds of millions’ minting VPN customers to become Lithuania’s tech darling

Prarthana Prakash

Nord Security started as an obscure, bootstrapped company in a part of the world where tech champions are rare: Lithuania.&nbsp;<div class="paywall-selector"></div><div class="paywall">



But it didn’t take long for it to become mainstream with its niche (and sometimes expensive) cyber security and virtual private network (VPN) products.&nbsp;



Tomas Okmanas and Eimantas Sabaliauskas saw this opportunity in 2012 while pursuing careers in IT and decided it was worth exploring.&nbsp;



Nord applied simple logic to help it grow: People rely on the internet for everything, which means the need for online security will only increase with time. Indeed, it did—Nord found a huge market among privacy-hungry internet surfers.



Okmanas admits that when the company was founded, “no one cared” outside of a few tech companies that took cybersecurity seriously.&nbsp;



As they continued building Nord, the use cases and demand grew. That also meant the founding duo had to become adept at more than just engineering.&nbsp;



“I&#8217;ve now had to learn [about] finance, the legal world, corporate governance, and then how to run teams and companies,” Okmanas told Fortune last year.



Best known for its VPN software, Nord allows users to use the Internet while protecting their data and IP addresses. That means more privacy for the average user when browsing the web—but the technology is also highly controversial.&nbsp;



VPNs can be used to circumvent <a href="https://www.reuters.com/world/europe/russia-spend-over-half-billion-dollars-bolster-internet-censorship-system-2024-09-10/">government restrictions</a> on the web and have been attacked by Hollywood <a href="https://www.wired.com/story/hollywood-piracy-vpn-lawsuits/">film studios</a> for their use in piracy and copyright infringement.&nbsp;



But Lithuania-based Nord isn’t bogged down by these legal and ethical concerns. It focuses on bolstering its primary use case of securely using the web. The company’s servers don’t log user data—which is part of the privacy spiel. It has <a href="https://nordvpn.com/blog/how-nordvpn-protects-the-privacy-of-its-customers/">argued</a> that ad nauseum, and told Fortune that people using VPN solely to access blocked or unavailable streaming services is “outdated.” &nbsp;&nbsp;&nbsp;



Okmanas says that Nord’s tools are rarely used for illegal or wrongful purposes. The company also has systems in place to prevent security breaches and other online threats.&nbsp;&nbsp;



“Our goal is really to connect as much people as possible to this Nord cloud network, where people could use it in a very safe way,” he said.&nbsp;&nbsp;


<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" data-src="https://fortune.com/img-assets/wp-content/uploads/2024/09/Nord-pilnos-kokybes-109-e1727364596193.jpg?w=1024&#038;h=683" alt="Tomas Okmanas and Eimantas Sabaliauskas" class="lazyload wp-image-4022639" src="https://fortune.com/img-assets/wp-content/uploads/2024/09/Nord-pilnos-kokybes-109-e1727364596193.jpg?w=1024&#038;h=683" width="1024" height="683" original-width="2880" original-height="1920"><figcaption>Tomas Okmanas and Eimantas Sabaliauskas, co-CEOs of Nord Security.</figcaption><div class="image-credit">COURTESY OF NORD SECURITY</div></figure>



<h2 class="wp-block-heading">The VPN world and more</h2>



The broad strokes of Nord’s growth are remarkable: in 2022, 10 years after its founding, it achieved <a href="https://techcrunch.com/2022/04/06/nord-security-the-startup-behind-nordvpn-raises-its-first-ever-funding-100m-at-a-1-6b-valuation/">unicorn status</a>, has over 15 million users worldwide, and is one of Lithuania’s most well-known companies (Vinted is another one).&nbsp;



Okmanas said Nord has seen “tremendous growth” over the years. In September 2023, the company raised $100 million at a $3 billion valuation, nearly double the amount it raised when it became a unicorn a year earlier. 



The company has been out shopping to help with its expansion. It announced a merger <a href="https://nordvpn.com/blog/nord-security-surfshark-merger-agreement/?srsltid=AfmBOoqchrgDNlNbrFPzNlBGbVdQUhE079mUTy-JMa7tt2jP6ehmEz8H">with Surfshark</a> in 2022 and purchased competitor IronWall this year, helping Nord grow its clout in <a href="https://www.ft.com/content/04f7a4fb-a985-4305-a161-c26cd0b1a99d">cybersecurity</a> and beyond. Most of Nord’s user base is centered in the U.S. and spans a wide age range, while the rest of its customers are a mixed bag of average internet users and small and medium-sized businesses.  



Nord has made its presence felt—it’s not unusual to stumble on its ads while listening to a podcast or watching a YouTube or TikTok video (its VPN was spotted being used by rapper Drake, <a href="https://www.bloomberg.com/news/features/2023-04-24/nordvpn-expressvpn-balance-privacy-and-making-money">Bloomberg reported</a>). Okmanas says this is a deliberate effort to educate more people on Nord&#8217;s online tools. That’s just one of the many ways the company spends to get new customers on board as online threats continue to loom.&nbsp;



“We spend hundreds of millions of dollars for our customer acquisition, and it works. Users see the value, and we&#8217;re very happy,” Okmanas said.&nbsp;



<h2 class="wp-block-heading">Nord’s next steps</h2>



Nord has another building coming up in Vilnius as it continues to expand its <a href="https://sifted.eu/articles/nord-security-bootstrap-ipo">business</a>. For companies of a big enough scale as Nord, an IPO seems like the natural next step (at least that’s what Airbnb and Uber did, and it’s one of the avenues <a href="https://www.ey.com/en_gl/insights/ipo/ipo-strategic-option-for-unicorns">companies</a> are lured to).&nbsp;



But Nord doesn’t see it that way. Their goal is IPO readiness but not necessarily to go public immediately, as it’s a good barometer of where the company stands.&nbsp;



“We have big ambitions but don&#8217;t need that to do an IPO,” Okmanas said. Nord may have started small, but it has been profitable on a cash flow basis since the beginning. It turned EBITDA-positive last year.&nbsp;



He said Nord is under no deadline but wants to prepare it so that it’s ready for an IPO at the “press of a button.”



“But for sure, we don&#8217;t need it, and we won&#8217;t do it in the next six months or a year,” the co-CEO said.



“We&#8217;re in a very lucky position where we&#8217;re growing extremely fast, and we&#8217;re very profitable.”



A version of this story was originally published on <a href="https://fortune.com/">Fortune.com</a> on Sep. 30, 2024.</div>

Nord has seen remarkable growth offering a niche, sometimes controversial service—VPN. It has big ambitions for a future, which may or may not need an IPO.

How Nord, the Lithuanian unicorn, approaches a potential IPO

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Nord has seen remarkable growth offering a niche, sometimes controversial service—VPN. It's also Lithuania's claim to tech fame.

How Nord VPN has become Lithuania’s tech darling

How Nord, the Lithuanian unicorn, approaches a potential IPO | Fortune Europe

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