Cynomi Raises $37M for AI-Powered SMB Cybersecurity

Cybersecurity Startup Cynomi Secures $37 Million in Series B Funding

Small and medium businesses (SMBs) are increasingly becoming the focus of cybersecurity attacks. Recent data indicates that one in three small businesses experienced a data breach in the past year.

In response to this growing threat, SMBs are actively seeking solutions for threat detection and prevention. Cynomi, a startup addressing this need, has announced $37 million in funding.

Funding Details and Company Background

This Series B round is co-led by Insight Partners and Entrée Capital, with participation from existing investors including Canaan, Flint Capital, and S16VC.

Sources suggest the company’s post-money valuation exceeds $140 million.

Cynomi had previously raised approximately $23 million, including a seed round completed in 2022.

Founded by CEO David Primor and COO Roy Azoulay, Cynomi is based in London and Tel Aviv. Dr. Primor brings expertise as a former CTO and head of R&D for the Israel Defense Forces, while Azoulay previously founded and led an incubator at Oxford University.

Cynomi’s AI-Powered Approach

Cynomi utilizes AI-based agents to automate complex and high-volume tasks within cybersecurity.

However, the company positions its product as more than just an AI agent – it’s a “virtual CISO.”

This automated, AI-driven decision-maker assists smaller organizations in managing their security operations effectively.

Key Capabilities of the Virtual CISO

The platform offers a range of functionalities, including:

• Network assessment
• Security policy planning
• Remediation plan creation
• Progress tracking
• Vulnerability analysis
• System optimization recommendations
• Network status and health reporting

Cynomi doesn’t sell directly to SMBs. Instead, it partners with third-party providers of network connectivity and managed services.

Addressing a Significant Market Gap

The market opportunity Cynomi is targeting is substantial. Hackers are increasingly shifting their focus to the large number of SMBs, which represent 90% of all businesses globally.

SMBs often struggle with limited budgets and staffing, making a solution like Cynomi particularly valuable.

“A virtual CISO service can start at $10,000 to $12,000 a year,” explains Azoulay. “A human CISO would be at least 10 to 15 times that cost.”

Growth and Future Plans

Cynomi has experienced significant growth, with annual recurring revenue tripling in the last year.

The company currently serves over 100 service providers and consultancies, including major telecommunications companies like Deutsche Telekom, reaching thousands of SMBs.

Approximately 80% of Cynomi’s customers are located in the U.S., with plans to expand into Europe and other markets.

The new funding will be allocated to research and development, as well as business development initiatives.

Cynomi envisions becoming the “operating system” for the cybersecurity consulting space, a market currently valued at $163 billion.

Competitive Landscape

Numerous cybersecurity companies target SMBs, with many utilizing service providers as their primary sales channel.

Key competitors include Vanta, Cohere, Qualys, Coro, Bastion, Guardz, CyberSmart, Cowbell, and DataGuard.

Investor Perspective

Philine Huizing, managing director at Insight Partners, highlighted the “vCISO” concept as a key factor in Insight’s investment decision.

“We believe Cynomi is defining a new category with its vCISO platform,” she stated.

The company’s focus on collaboration with managed service providers allows for customization and integration with existing offerings, potentially differentiating it from commoditized solutions.

Huizing added, “MSPs can assess each client’s unique risks, customize strategies by industry, and efficiently manage day-to-day interactions, making them more impactful.”