Hunted Labs Secures $3M to Enhance Open Source Security

George Barnes Invests in Cybersecurity Startup Hunted Labs

George Barnes, previously the deputy director of the National Security Agency (NSA), has made his inaugural investment as a venture capitalist. This move comes as part of his new role with Red Cell Partners, a VC incubation studio.

The investment is a $3 million pre-seed funding round directed towards Hunted Labs, an open source cybersecurity startup. Barnes disclosed this information exclusively to TechCrunch.

A 35-Year Career at the NSA

Barnes dedicated his entire 35-year professional life to the NSA. He began his career as an engineer and undertook assignments spanning from locations like London to active conflict zones, as he described.

From 2017 to 2023, he served as the agency’s deputy director.

Leveraging Offensive Capabilities for Defense

During his tenure, the NSA successfully developed the capability to infiltrate adversary systems, Barnes explained to TechCrunch. He emphasized that this offensive hacking ability is instrumental in enhancing defensive strategies.

According to Barnes, the NSA’s proficiency in identifying vulnerabilities and zero-day exploits stems directly from this experience.

Hunted Labs and the Platform One Initiative

Barnes expressed his enthusiasm for Hunted Labs, founded by Hayden Smith. Smith’s background includes work on DevOps and cybersecurity for various projects within the Department of Defense (DoD).

Smith’s most recent government project involved the DoD’s Platform One initiative, described as a “huge software factory” by Smith in an interview with TechCrunch.

Platform One was designed to accelerate application deployment for DoD programmers by streamlining approvals and utilizing pre-approved, secured cloud or open source software (OSS).

The Need for Open Source Supply Chain Security

The development of Platform One raised a critical question: Who are the developers contributing to this OSS software?

“We lacked insight into the affiliations and potential foreign influences of these contributors,” Smith stated. “There wasn't a readily available solution to address this concern at scale.”

This gap in the market is what Hunted Labs aims to fill.

A Significant Customer Acquisition Through Cold Outreach

The critical need for understanding the individuals behind software development was brought into sharp focus in 2024. A single engineer at Microsoft identified a backdoor within XZ Utils, a prevalent software component integrated into nearly all Linux distributions.

The individual responsible for this security flaw had dedicated years to establishing trust and concealing their activities before introducing the malicious code.

Smith, aiming to commercialize the background check services he previously provided to Platform One, initiated contact with potential investors via cold email. Barnes responded to Smith’s outreach.

Smith was surprised to find he had connected with the former deputy director of the NSA.

Barnes was sufficiently impressed with the concept to invite Hunted Labs into Red Cell’s paid, three-month “discovery” phase within their incubator program. This incubator functions similarly to an accelerator, but the venture capital firm takes on a more collaborative role, actively developing startup ideas.

These arrangements often involve acquiring a larger equity stake compared to typical seed funding, while simultaneously offering increased mentorship and support. Red Cell has not disclosed the extent of its ownership in Hunted Labs.

During this initial period, Hunted Labs further developed its product, securing both customers and a $3 million pre-seed investment from Red Cell.

The startup has also successfully obtained a $1.79 million contract with the Space Development Agency, as confirmed by Smith.

Notably, this contract wasn't secured through Red Cell’s network. Instead, it stemmed from the existing Department of Defense (DoD) connections of Smith and Tim Barone, a former DoD project security engineer.

Barone, alongside Smith’s wife, Amanda Aguayo, is also a co-founder of Hunted Labs. Barnes explained his limited direct involvement in sales due to a mandatory two-year cooling-off period following his DoD service.

The contract was awarded through the AFWERX program, which provides funding for research contracts to small businesses.

However, the founders’ established reputations within the DoD meant they didn’t require the typical introductions to government buyers often needed by Silicon Valley-based defense tech startups.

“Their professional standing is well-recognized, which facilitates access,” Barnes stated.

Hunted Labs also delivers conventional software supply chain security management services, including identifying software components in use and detecting vulnerabilities within the code.

In this area, they face competition from established companies such as Black Duck Software, Mend.io, and Snyk.