TL;DR:
- Guardz, an Israeli startup, secures $18 million in a Series A funding round.
- The company has shifted its focus to collaborating with managed service providers (MSPs) instead of selling directly to SMBs.
- Guardz’s AI-powered security platform offers automated threat detection, remediation, and security breach simulations.
- It currently serves customers in the US, UK, and Australia through around 200 MSPs.
- The SMB cybersecurity market is rapidly growing due to increased cyber threats and advances in AI.
- Guardz faces competition from companies like CyberSmart, CrowdStrike, and Check Point.
- SMBs represent a significant market segment, comprising over 99% of global businesses.
Main AI News:
In the ever-evolving landscape of cybersecurity, small and medium-sized businesses (SMBs) have become prime targets for cybercriminals, accounting for approximately half of all global breaches. Recognizing this pressing need for enhanced security, Guardz, an innovative Israeli startup, has recently secured an impressive $18 million in a Series A funding round.
Guardz made its debut just under a year ago, in January 2023, and has since undergone a strategic shift. Rather than selling directly to SMBs, the company now collaborates with managed service providers (MSPs) that specialize in offering IT services to SMBs. This pivot has proven successful, with MSPs integrating Guardz’s technology into their own offerings, effectively delivering a comprehensive security solution under their own branding.
Dor Eisner, the CEO of Guardz, describes this approach as a “blended solution,” combining the power of Guardz with the MSP’s expertise and branding. The funding infusion will primarily be used to expand Guardz’s engineering talent, further refining its product. Presently, the company serves customers in the United States, the United Kingdom, and Australia, boasting a portfolio of around 200 MSPs and over 3,000 SMB clients, totaling approximately 36,000 users. While security remains the core revenue driver, Guardz also offers cyber insurance as an optional add-on.
Leading this funding round is Glilot+, the early growth fund of Glilot Capital Partners, joined by ClearSky and previous investors Hanaco Ventures, iAngels, and GKFF Ventures. Although Guardz has not disclosed its valuation, Eisner indicated that it has tripled since its last funding round, a $10 million seed round that coincided with the company emerging from stealth mode.
In a broader context, Guardz is targeting a significant and urgent gap in the market. Historically, SMBs were less attractive to cybercriminals due to their fragmented nature and lower potential for a substantial return on investment compared to larger enterprises. However, the rise of artificial intelligence has simplified the process for malicious actors to launch and scale campaigns targeting vulnerabilities, creating a critical challenge for SMBs that typically lack the in-house expertise and tools to defend against these threats.
Guardz’s mission is to provide SMBs with a robust security platform comparable to what larger organizations employ. The company’s managed service approach minimizes the direct involvement of customers while integrating advanced AI-based automation. Guardz’s tools automatically detect and mitigate malicious activities, generate activity reports, and empower MSPs to conduct security breach simulations tailored to specific SMB needs, thereby enhancing employee training.
Eisner emphasized the constant evolution of hacker tactics, citing a recent discovery involving automated forwarding rules for Microsoft 365 users, offering malicious actors a discreet means to collect emails. Guardz swiftly responded by developing detection and remediation measures to counter this threat, recognizing the potential for such techniques to be used in multivector attacks alongside phishing attempts.
SMBs have become a prime focus for technology companies offering enterprise services due to advances in cloud services and AI, which have improved the economics of serving this vast market segment, comprising over 99% of all global businesses. This heightened interest extends beyond cybersecurity, with companies like SumUp securing over $300 million in funding to expand their platforms for SMBs. Guardz faces competition from various cybersecurity providers, including CyberSmart in the UK, as well as industry giants like CrowdStrike and Check Point.
Lior Litwak, Managing Partner of Glilot+, expressed excitement about the partnership with Guardz, praising the company’s holistic and user-friendly approach to cybersecurity tailored to the needs of MSPs and the often-overlooked SMB market. Litwak emphasized their commitment to securing the digital world for those who need it most, underscoring Guardz’s potential to make a significant impact in the small business cybersecurity landscape.
Conclusion:
Guardz’s successful funding round underscores the growing importance of SMB cybersecurity in a world increasingly threatened by cybercrime. The shift towards MSP collaborations allows Guardz to tap into a vast SMB market while providing a robust AI-driven security solution. As SMBs continue to face evolving cyber threats, Guardz’s expansion reflects the urgency of strengthening cybersecurity measures in this critical market segment.
