Small and medium businesses (SMBs) are increasingly becoming the target of cyber attacks, with one in three breached last year. To address this growing concern, London and Tel Aviv-based startup Cynomi has raised $37 million in funding to expand its AI-powered virtual Chief Information Security Officer (vCISO) platform, designed to help SMBs detect and prevent cyber threats.

The funding round was co-led by Insight Partners and Entrée Capital, with previous backers Canaan, Flint Capital, and S16VC also participating. This brings Cynomi's total funding to around $60 million, with a post-money valuation of over $140 million. The startup's vCISO platform uses AI-based agents and copilots to provide SMBs with a comprehensive cybersecurity solution, helping them understand how to run their security operations and protect against threats.

Cynomi's founders, CEO David Primor and COO Roy Azoulay, bring a wealth of experience in cybersecurity and market timing to the table. Primor, a PhD, previously served as the CTO and head of R&D of the Israeli Defense Forces, while Azoulay has a background in deepfake detection and startup incubation. Their combined expertise has enabled Cynomi to develop a unique solution that addresses the specific challenges faced by SMBs in the cybersecurity space.

SMBs are particularly vulnerable to cyber attacks due to limited budgets and manpower, making it difficult for them to invest in robust cybersecurity measures. Cynomi's vCISO platform offers a cost-effective solution, with pricing starting at $10,000 to $12,000 per year, compared to the $100,000 to $150,000 per year required to hire a human CISO. The platform provides a range of features, including network assessment, security policy planning, remediation planning, and analytics, all designed to help SMBs strengthen their cybersecurity posture.

Cynomi's business model involves partnering with service providers, such as telcos and managed service providers, to offer its vCISO platform to their SMB customers. This approach has proven successful, with the startup's annual recurring revenue (ARR) tripling in the last year. Cynomi has already partnered with over 100 service providers, including Deutsche Telekom, and plans to expand its reach to Europe and other markets in the future.

The funding will be used to further develop Cynomi's vCISO platform and expand its business development efforts. The startup believes that its platform has the potential to become the operating system for the cybersecurity consulting space, which is valued at $163 billion. With its innovative approach and growing customer base, Cynomi is well-positioned to capitalize on this opportunity and make a significant impact in the cybersecurity industry.

Cynomi's success has not gone unnoticed, with Insight Partners' MD, Philine Huizing, citing the startup's vCISO platform as a key factor in their investment decision. "We believe Cynomi is defining a new category with its vCISO platform," she said. The startup's focus on working with managed service providers also sets it apart from other cybersecurity companies targeting SMBs, allowing it to offer a tailored solution that meets the unique needs of each client.

As cyber attacks continue to pose a significant threat to SMBs, Cynomi's innovative approach and growing success are welcome news for the industry. With its AI-powered vCISO platform and expanding partner network, Cynomi is well-positioned to play a leading role in protecting SMBs from cyber threats and shaping the future of cybersecurity.