With advancements in artificial intelligence, small and medium businesses have now become the prime target in the fight against cybercrime. According to some estimates, they account for roughly half of all breaches globally. In light of this, one company has recently received a significant round of funding to expand their services, highlighting the growing demand for better security defenses in the market.
Guardz, an Israeli startup, has developed an all-in-one security and cyber insurance solution for small and medium businesses. They have recently raised $18 million in a Series A round of funding.
“This is the journey. It’s a blended solution, powered by Guardz but with the logo of the MSP out in front,” said Dor Eisner, CEO of Guardz, in an interview.
The company emerged from stealth mode less than a year ago, in January 2023. However, they have already made some changes to their initial approach. Instead of selling directly to SMBs, they are now working with managed service providers (MSPs) who offer and manage IT services for SMBs. This redirection has proven to be more successful, as MSPs have become the primary means of introducing Guardz’s product to SMBs.
- MSPs are now able to create their own offerings “powered” by Guardz.
- Guardz will use the funding to hire more engineering talent and continue evolving their platform, which is currently being used by customers in the U.S., U.K., and Australia.
- The company has around 200 MSPs on board, serving approximately 3,000 SMBs and 36,000 seats overall.
While security remains the main revenue driver, cyber insurance is also available as an add-on option.
Leading the funding round is Glilot+, the early growth fund of Glilot Capital Partners. ClearSky and previous investors Hanaco Ventures, iAngels, and GKFF Ventures also participated.
Guardz is not disclosing their current valuation, but CEO Dor Eisner mentioned that it has tripled since their last funding round of $10 million. This occurred at the same time they emerged from stealth mode.
To put things into perspective, the startup has now raised a total of $28 million. They have also secured around 36,000 “seats” and are rapidly growing. In fact, there are approximately 150,000 MSPs worldwide serving the SMB market, indicating a significant opportunity for more customers.
“Every day we find a new method used by hackers,” said Eisner. He went on to share a recent discovery involving automated forwarding rules for Microsoft 365, which malicious actors can use to collect emails undetected.
“We found that people were talking about these attacks on the dark web, so we decided to develop detection and remediation around it,” said Eisner. He added that this technique is often used as part of a multi-vector attack, alongside phishing.
It’s no surprise that SMBs have become a key target for tech companies developing enterprise services. Not only have advancements in cloud services and AI made it more feasible, but SMBs also represent over 99% of all businesses globally. This presents a massive market with potential in various verticals.
“When we met the exceptional team at Guardz, it became evident that they had built the ultimate solution for small business cybersecurity – a longstanding and rapidly growing market need we’ve been monitoring at Glilot for a while,” stated Lior Litwak, managing partner and head of Glilot+, in a statement.
Litwak further praised Guardz for their impressive and user-friendly cybersecurity and cyber insurance risk-assessment platform tailored to MSPs. He also expressed excitement to lead the funding round and join the team on their mission to secure the digital world for those who need it the most.