Small and medium-sized businesses (SMBs) have become prime targets for cyberattacks, with nearly one-third reporting a breach last year. In response to this escalating threat landscape, cybersecurity startup Cynomi announced today it has secured $37 million in new funding to enhance its AI-powered cybersecurity platform tailored specifically for SMBs.
The investment round was co-led by prominent venture investors Insight Partners and Entrée Capital, with additional participation from existing investors Canaan, Flint Capital, and S16VC. This latest fundraise follows Cynomi’s prior capital raise, bringing its total funding to approximately $60 million to date and elevating its post-money valuation to more than $140 million, according to sources familiar with the deal.
Cynomi, headquartered in London and Tel Aviv, was founded by an experienced team with deep cybersecurity expertise. Its CEO, David Primor, previously served as Chief Technology Officer and head of R&D with the Israeli Defense Forces. COO Roy Azoulay brings extensive entrepreneurial experience in cybersecurity innovation, founding a successful deepfake detection startup and spearheading Oxford University’s first tech incubator, which notably supported identity verification startup Onfido in its early stages.
The core innovation at Cynomi is its concept of an autonomous “virtual Chief Information Security Officer” (vCISO), driven entirely by artificial intelligence. Rather than simply functioning as an advanced security aid, the AI takes on high-level cybersecurity decision-making duties that traditionally fall within the purview of human CISOs. The platform is able to perform detailed network assessments, construct tailored security policies, outline remediation strategies, continuously track implemented security measures, analyze network vulnerabilities, offer recommendations for system optimization, and deliver comprehensive status reports on network health and security readiness.
Rather than selling directly to end-users, Cynomi markets its services through managed service providers (MSPs) and ICT companies, which are common channels for SMBs to acquire IT and cybersecurity services. This indirect sales model has allowed Cynomi to rapidly scale its customer base throughout the U.S., currently accounting for about 80% of its business, including partnerships with major telecom providers such as Deutsche Telekom. Cynomi’s Annual Recurring Revenue (ARR) has reportedly tripled in the past year.
Fundamental to Cynomi’s success is addressing the unique cybersecurity challenges faced by SMBs, including tighter budget constraints and fewer dedicated cybersecurity personnel compared to larger enterprises. As Azoulay emphasizes, SMBs benefit significantly from AI-driven virtual services, which can dramatically reduce annual security expenditure. A typical virtual CISO service runs between $10,000 to $12,000 annually, markedly lower than the $150,000 or more it would cost to engage a human counterpart full-time over the same period.
Leveraging the fresh round of funding, Cynomi plans significant investments in research and development as well as further expansion into Europe and other global markets. The founders also envision the company’s technology evolving beyond today’s virtual CISO concept, potentially becoming the foundational operating system for a cybersecurity consulting market that, according to Azoulay, is currently fragmented.
The growing cyber threat environment has led investors to back multiple cybersecurity startups focused on SMB segments. Competitors targeting similar spaces and often utilizing MSP channels include Vanta, Cohere, Qualys, Guardz, CyberSmart, Bastion, Coro, Cowbell, and DataGuard.
Philine Huizing, Managing Director at Insight Partners, stated the firm sees immense potential in Cynomi’s distinctive virtual CISO offering, which she believes effectively establishes a new product category within cybersecurity. Additionally, she noted that Cynomi’s flexible integration with MSPs enables customizable security offerings tailored to specific industry risks and unique customer requirements, further setting the startup apart in a crowded marketplace.
