Knox Secures $6.5M to Challenge Palantir in Federal Compliance

The Challenges and Costs of FedRAMP Compliance

Securing federal software contracts often involves a significant, yet frequently underestimated, expense: achieving FedRAMP compliance, the standard for government SaaS security. This process can be lengthy and demand considerable resources.

Time and Financial Investment

Typically, attaining FedRAMP certification requires up to three years and exceeds $3 million in costs. These expenses encompass personnel, such as security operations engineers, and essential security audits, as highlighted by Irina Denisenko, CEO of Knox.

Denisenko, pictured above, founded Knox last year with the specific goal of accelerating this security authorization timeline to just three months, while drastically reducing the associated costs for software vendors.

Knox's Seed Funding

On Thursday, Knox announced the successful completion of a $6.5 million seed funding round. This round was spearheaded by Felicis, with additional participation from Ridgeline and FirsthandVC.

The Genesis of Knox

Denisenko’s decision to create Knox stemmed from her direct experience with the difficulties of obtaining FedRAMP. While serving as COO at Class, an education startup, the company secured a contract with the U.S. Air Force.

Rather than endure the conventional three-year, multi-million dollar process, Denisenko facilitated Class.com’s acquisition of CoSo Cloud, a company already FedRAMP certified and managing Adobe’s federal cloud infrastructure.

This acquisition enabled Class to achieve FedRAMP certification within a mere six months. Denisenko conveyed to TechCrunch that without this strategic move, “Class would still be pursuing FedRAMP today.”

Responding to Emerging National Security Concerns

Towards the end of last year, recognizing the growing national security implications of the increasing number of AI agents, Denisenko decided to establish the managed cloud solution as an independent startup, Knox.

Accessibility for SaaS Vendors

Larger software companies, including CrowdStrike, Palo Alto Networks, and Salesforce, possess the resources to navigate FedRAMP certification. However, as government adoption of software expands, Denisenko envisions Knox empowering SaaS vendors to more readily gain FedRAMP access to lucrative government contracts.

How Knox Facilitates Compliance

Named after the historic gold-storage fort in Kentucky, Knox delivers a compliance management platform through a managed cloud environment. Customers connect their codebase to this platform.

The company’s software continuously performs tests and audits to pinpoint areas where a customer’s infrastructure, code, and security controls fall short of FedRAMP standards. It then either resolves these issues directly or alerts the customer to them.

Furthermore, Knox provides tools for tracking and verifying policy adherence, such as personnel training and vendor management.

“This is genuinely a complex and risky undertaking,” she stated. “We are prepared to assume that risk.”

Current Knox Clients

Knox is currently managing security and compliance for prominent organizations like Adobe, Class, Spacelift, and a leading LLM provider. Denisenko anticipates exceeding a dozen active customers in the cloud by year-end.

Competition in the FedRAMP Space

While seemingly specialized, FedRAMP authorization management has a significant competitor: Palantir.

Palantir’s FedStart offering, launched just two years ago, has already attracted clients such as Anthropic and Windsurf.

Validating Knox’s Approach

For Denisenko, Palantir’s early success with FedRAMP serves as validation of Knox’s core mission.

“Even Anthropic required assistance in navigating this process,” she noted, suggesting that software companies will increasingly choose to outsource their FedRAMP compliance to specialized providers like Knox.