Guardz collects $18M to expand its AI-based security platform for SMBs

Due to advancements in AI, there has been a significant rise in cyber threats targeting small and medium businesses (SMBs), comprising approximately half of global breaches. Recognizing the growing demand for enhanced defenses in the market, Guardz, an Israeli startup specializing in all-in-one security and cyber insurance services for SMBs, has secured $18 million in a Series A funding round.

Originally operating with a direct-to-SMB approach, Guardz shifted its strategy after emerging from stealth in January 2023. It now collaborates with managed service providers (MSPs) that sell and manage IT services for SMBs. This pivot enables MSPs to develop their own solutions with Guardz’s technology as the foundation. The funding will be allocated to hiring additional engineering talent to further evolve Guardz’s product, with a focus on its current customer base in the U.S., U.K., and Australia.

Guardz, founded by Dor Eisner and Alon Lavi, currently boasts around 200 MSP partners, serving approximately 3,000 SMBs and covering 36,000 seats. The primary revenue stream remains security, with cyber insurance offered as an optional add-on. The funding round, led by Glilot+, also includes participation from ClearSky, Hanaco Ventures, iAngels, and GKFF Ventures. Although the company does not disclose its valuation, Eisner mentioned that it has tripled since its previous $10 million seed round.

Guardz addresses a crucial gap in the market by focusing on the cybersecurity needs of SMBs, which were previously overlooked by cybercriminals due to their fragmentation and perceived lower return on investment. The integration of AI-based automation in Guardz’s managed service allows for the detection of malicious activity, remediation, and automated activity reports. The platform also facilitates security breach simulations tailored to individual SMBs, aiding in employee training.

The funding will support the expansion of Guardz’s tools to counter increasingly sophisticated cyber threats. Eisner emphasized the continuous discovery of new hacking methods, such as a recent finding involving automated forwarding rules in Microsoft 365.

As SMBs represent over 99% of all businesses globally, they have become a prime target for tech companies offering enterprise services. Guardz faces competition from other cybersecurity providers like CyberSmart, CrowdStrike, and Check Point. The funding and strategic focus on MSP partnerships position Guardz to address the pressing cybersecurity needs of SMBs and contribute to securing the digital landscape for these businesses.