Cyera is a cybersecurity startup that thinks AI will be the next big problem in protecting corporate data. As demand for AI grows, Cyera is raising a lot of money.
Sources close to the deal say that the company is almost done closing a round of nearly $300 million that will triple its value to $1.5 billion. The tools that the company makes use AI to get accurate pictures of where and how data is being used in organisations’ networks. Sources say that the well-known venture capital company Coatue is in charge of the round of funding.
The deal should be done by the beginning of April. It is not clear what other funders are taking part in this round. Cyera (pronounced “Sierra”), which is based in San Mateo and has roots in Israel, had raised a total of $160 million before this. Its current $500 million value comes from last year.
Some of the companies that have backed Cyera in the past are Sequoia (which led both of its previous rounds, including a $100 million round less than a year ago, in June 2023) Accel, Redpoint, and the Israeli firms CyberStarts and Cerca Partners.
Cyera, Coatue, and Sequoia all refused to say anything.
There were rumours about this round earlier this month. Since then, we can report that the amount being raised has gone up by about $150 million. Until now, we didn’t know who the investors were.
In more than one way, this new investment by Cyera stands out.
First, it shows that cybersecurity is still getting business, investors, and big checks, even from companies like Coatue that have backed off from some of their riskier bets. This is true even though the tech economy and venture capital market are under a lot of pressure. (Notably, Coatue closed a fairly new venture office in London earlier this year, which was a sign that it would be doing a lot less business in Europe going forward.)
Second, this round shows how important AI is in the tech market right now in a new way.
Startups like OpenAI and Mistral keep getting huge investments to build out their big language models. In fact, it’s hard to find a business today that isn’t looking at how it can use AI more. But computer security teams are also becoming more aware of the issues AI can cause.
Yes, bad hackers are using AI to break into networks. On the other hand, AI is helping cybersecurity companies like Cyera fight bad actors and get a better handle on business data.
But AI is also playing a different role that companies aren’t aware of: when they use AI services like chatbots or generative AI apps, they might break their own intellectual property and data protection rules. Cyera also plans to deal with the second of these situations.
A Cyera employee said that AI is a “huge driver” of business right now. It’s interesting, though, that the startup didn’t set out to make tools that would show how and where data could be misused in AI apps.
At first, its main goal was to help businesses in a wider range of areas, such as healthcare, technology, finance, manufacturing, retail, and travel, by giving them tools for sorting data, keeping track of how and where data is moving, finding problems and fixing them, and controlling who can see what data.
Based on what we know, that business has brought in tens of millions of dollars in sales so far.
We’ve heard from a source that Cyera has recently seen a change in what its customers want to watch.
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Many companies are adding more technology to their networks, which worries people because it will be harder to sort and check for the use of private data. He said, “It’s all about what businesses need to do to get ready for AI.” “AI has a problem with data.”
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