A cybersecurity startup called Cyera believes AI will be the next big challenge in enterprise data protection and has raised significant funding due to the growing demand for AI.
The company, which is developing AI-enhanced tools to understand exactly where and how data in an organization's network is being used, has not finalized a nearly $300 million round of funding, sources said. The company is reportedly close to tripling its valuation to $1.5 billion in the process. very close to agreement. Prominent venture firm Coatue is leading the funding round, sources said.
The deal is expected to close in early April. It's unclear which other investors are participating in the round. Previously, Cyera (pronounced “Sierra”, headquartered in San Mateo, with roots in Israel) had raised a total of $160 million last year, including its current valuation of $500 million. .
Cyera's previous backers include Sequoia (which led both of its previous two rounds, including a $100 million round less than a year ago in June 2023), Accel, Redpoint, and Israeli company CyberStarts. and Cerca Partners.
Cyera, Coatue and Sequoia declined to comment.
Rumors about this round were circulating earlier this month. Since then, we can confirm that the amount raised has increased by approximately $150 million, and the names of the investors were previously unknown.
This latest investment in Cyera is notable in several ways.
First, despite growing pressures in the tech economy and venture market, cybersecurity continues to attract companies, investors, and big checks, and even those like Coteux, who have pulled back from the frenzy. This highlights how much attention cybersecurity is being paid by companies. (Notably, Coatue closed its relatively new venture office in London earlier this year, suggesting the company will significantly reduce its European activities going forward.)
Second, this round sheds new light on the huge role AI is playing in today's technology market.
Start-ups like OpenAI and Mistral continue to attract huge investments to build language models at scale, and it's hard to find an organization today that isn't evaluating how to further leverage AI in their business. . But information security teams are also becoming more aware of the problems that AI can pose.
Yes, AI is being weaponized by malicious hackers to infiltrate networks, and it's helping cybersecurity companies (like Cyera itself) fight bad guys and gain better visibility into corporate data.
But more subconsciously, it also plays another role. Companies themselves run the risk of violating their internal intellectual property and data protection policies by interacting with AI services such as chatbots and generative AI applications. Cyera also seeks to address the latter of these scenarios.
AI is now a “huge driver” for Cyera's business, the people said. But interestingly, the startup didn't set out to build a tool to identify where and how data is exposed and can be misused in the AI applications themselves.
The initial focus was more general, working with companies in industries such as healthcare, technology, financial services, manufacturing, retail, and travel to improve data classification, posture management (where and how data moves), and more. The goal was to provide tools for tracking (snapshots), discovery, and discovery. Response and access governance.
As far as we understand, this business is generating tens of millions of dollars in current ARR for startups.
But just recently, Cyera has noticed a change in what customers are asking for tracking, sources said.
Many organizations are introducing more automation into their networks, but there are concerns that this will make it more difficult to classify and screen sensitive data for use. “Everything businesses need to do to prepare for AI is important,” he said. “AI is a data problem.”