Small and medium-sized businesses (SMBs) have become prominent targets for cybersecurity attacks, with one in three compromised last year. In response to this rising threat, SMBs are becoming increasingly proactive in identifying and mitigating these vulnerabilities. To support this demand, Cynomi, a startup, has announced $37 million in funding. This round of funding is co-led by Insight Partners and Entrée Capital, with participation from existing supporters such as Canaan, Flint Capital, and S16VC. Sources close to the deal have indicated that the post-money valuation exceeds $140 million.
Cynomi, based in London and Tel Aviv, was founded by David Primor, who previously served as CTO and head of R&D for the Israeli Defense Forces, and COO Roy Azoulay, whose background includes founding a company focused on deepfake detection and leading a startup incubator at Oxford University. The combined expertise of Primor and Azoulay in cybersecurity and market strategy is proving advantageous in the current venture.
The startup utilizes AI-based agents and copilots to handle intricate and high-volume tasks, pushing the limits of AI capabilities. CEO Primor describes Cynomi’s product as a “virtual CISO,” an automated decision-maker that aids smaller organizations in managing their security operations.
Cynomi’s virtual CISO can execute various tasks including network assessments, security policy planning, providing remediation plans, monitoring progress, performing vulnerability analytics, offering system optimization recommendations, and generating reports on overall network health. This service is not sold directly to SMBs but through third parties such as service providers typically used for network connectivity.
The market gap that Cynomi addresses is significant. Previously, cybercriminals focused on large enterprises, but advancements in AI and automation have shifted their attention toward SMBs, which, despite their smaller size, make up about 90% of all businesses globally. The high volume of SMBs represents a lucrative opportunity for malicious actors.
SMBs often struggle with budget and manpower constraints, making Cynomi’s offering particularly appealing. COO Azoulay notes that a virtual CISO service might start at $10,000 to $12,000 annually, whereas a human CISO could cost 10 to 15 times that amount. Furthermore, a virtual CISO is consistently available throughout the year.
Cynomi’s approach has proven successful, with the company’s annual recurring revenue tripling in the past year, according to Primor. The startup now collaborates with over 100 service providers and consultancies, including major telcos like Deutsche Telekom, who resell Cynomi’s services to their extensive SMB customer base. While the majority of its customers are in the U.S., Cynomi plans to expand into Europe and other markets.
The recent funding will be allocated to further research and development and business growth, as Cynomi sees potential beyond just virtual CISOs. Azoulay suggests that the cybersecurity consulting industry lacks a unified operating system, and Cynomi aims to fill that gap.
The cybersecurity market targeting SMBs is competitive, with several companies like Vanta, Cohere, Qualys, Coro, Bastion, Guardz, CyberSmart, Cowbell, and DataGuard also focusing on service providers as a sales channel. Philine Huizing, Managing Director at Insight Partners, expressed interest in Cynomi due to its innovative “vCISO” platform, describing it as a new category in the market.
Cynomi’s strategy of partnering with managed service providers allows for flexibility and customization, enabling these providers to tailor services to each client’s specific needs and mitigate risks effectively.
