## Cynomi Secures $37M to Bolster SMB Cybersecurity with AI-Powered “Virtual CISO”
Small and medium-sized businesses (SMBs) are increasingly under fire, with cybersecurity attacks breaching one in three last year. Recognizing the growing need for proactive defense, Cynomi, a London and Tel Aviv-based startup, has announced a $37 million Series B funding round to expand its AI-driven cybersecurity solution for this underserved market.
The round was co-led by Insight Partners and Entrée Capital, with participation from previous investors Canaan, Flint Capital, and S16VC. This latest investment brings Cynomi’s total funding to approximately $60 million, valuing the company at over $140 million post-money.
Founded by CEO David Primor, a former CTO and head of R&D for the Israeli Defense Forces, and COO Roy Azoulay, a serial entrepreneur and startup incubator pioneer, Cynomi is tackling the cybersecurity challenges faced by SMBs head-on. Their solution leverages AI to provide a “virtual CISO” (Chief Information Security Officer), an automated decision-maker designed to help smaller organizations manage their security operations effectively.
While many companies are incorporating AI-powered agents and copilots, Cynomi aims to go further. Their virtual CISO platform offers a comprehensive suite of tools and capabilities, including network assessment, security policy planning, remediation planning (though not yet remediation itself), progress tracking, vulnerability analysis, system optimization recommendations, and comprehensive network status reports.
Cynomi’s go-to-market strategy involves partnering with managed service providers (MSPs) that already serve SMBs for network connectivity and other IT services. This allows Cynomi to reach a wider audience and integrate seamlessly into existing IT ecosystems.
The need for affordable and effective cybersecurity solutions for SMBs is clear. Historically, malicious actors targeted larger enterprises, but the rise of AI and automation has enabled them to efficiently target the long tail of businesses. SMBs, comprising 90% of businesses globally, represent a lucrative target collectively. However, they often lack the budget and expertise to implement robust cybersecurity measures, creating a significant gap in the market.
According to Azoulay, a virtual CISO service from Cynomi can cost as little as $10,000 to $12,000 annually, a fraction of the cost of hiring a human CISO, which can easily reach ten to fifteen times that amount. Furthermore, the virtual CISO is available 24/7, 365 days a year.
This model has proven successful, with Cynomi tripling its annual recurring revenue (ARR) in the past year. The company currently boasts over 100 service provider and consultancy partners, including Deutsche Telekom, who resell Cynomi’s services to tens of thousands of SMB customers. The U.S. currently accounts for 80% of Cynomi’s customer base, but the company plans to expand into Europe and other markets.
The new funding will fuel further R&D and business development as Cynomi aims to become the “operating system” for the cybersecurity consulting space, which Azoulay estimates to be a $163 billion market.
Cynomi faces competition from a growing number of cybersecurity companies targeting SMBs, including Vanta, Cohere, Qualys, Coro, Bastion, Guardz, CyberSmart, Cowbell, and DataGuard. However, Insight Partners believes Cynomi’s “vCISO” approach sets it apart.
Philine Huizing, MD at Insight Partners, believes that Cynomi’s focus on MSPs allows them to tailor and augment the service with other offerings, preventing it from becoming a commoditized solution. “MSPs can assess each client’s unique risks, customize strategies by industry, and efficiently manage day-to-day interactions, making them more impactful,” she added.
With its AI-powered virtual CISO and strategic partnerships, Cynomi is well-positioned to address the growing cybersecurity needs of SMBs and become a leading player in the rapidly evolving cybersecurity landscape.
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