An estimated 230,000 new forms of malware are launched every day. The average cost of a data breach in 2020 will exceed $150 million. And only 38 percent of global organizations say they’re prepared to handle a sophisticated cyberattack.
That’s why Tamir Pardo — who served as chief of Mossad, Israel’s elite security intelligence service, between 2011 and 2016 — two years ago cofounded XM Cyber, a startup that claims to have pioneered the first platform capable of simulating, validating, and remediating advanced persistent threats (APT) with artificial intelligence (AI). It today announced that it has raised $22 million in a series A round with participation from Macquarie Capital, Nasdaq Ventures, Our Innovation Fund, and UST Global, bringing its total raised to date to $32 million.
XM Cyber CEO and cofounder Noam Erez said it’ll use the funding to “accelerate [XM Cyber’s] strong growth” through expanded sales, marketing, and engineering programs.
“In this era of hyper-sophisticated cybercrime, our solution demonstrates that organizations should be asking themselves [if their assets are secure], as there are a plethora of ways hackers can compromise them,” he said. “2018 has been an incredible year for XM Cyber, and this funding round will help us expand our footprint in 2019.”
XM Cyber’s HaXM platform — which was developed by a team of more than 30 cybersecurity researchers from Mossad, the Israel Security Agency, and the Israeli Intelligence Corps’ elite Unit 8200 — leverages a swath of offensive methods to expose a network’s blind spots and autonomously recommends ways they might be fixed. It effectively performs the role of so-called red teams, corporate hackers hired to find system exploits and vulnerabilities.
Unlike most human red teams, HaXM performs audits continuously, Erez said, finding holes in enterprise networks as they’re rearchitected and updated over time. Equally as usefully, its cloud dashboard enables IT teams to “replay” penetration tests in a timeline and see the theoretical damage they caused, such as credentials and data that would have been exposed.
XM Cyber has close to 30 customers in Europe, Israel, and the United States across a number of industries, including banking, insurance, and critical infrastructure. It previously raised $10 million from Swarth Group, the private equity company owned by Israeli billionaire Shaul Shani.
“As cyber-threats continue to evolve, we believe XM Cyber is addressing an important need, particularly for financial services and market infrastructure companies,” Gary Offner, head of Nasdaq Ventures, said. “We believe our investment in XM Cyber will help continue new developments in advancing breach simulation and detection technology and processes. This is an important, developing area of cybersecurity innovation and we’re pleased to be supporting its growth and expansion.”
Israel is a hotbed of cybersecurity talent. Of the roughly 166 startups in the region, 16 have raised more than $50 million in venture capital and another 18 have raised more than $30 million, according to a survey conducted by YL Ventures this summer.