Former NSA deputy director George Barnes has made his first investment as a venture capitalist, pouring $3 million into open-source cybersecurity startup Hunted Labs. The seed deal, announced exclusively to TechCrunch, marks Barnes' first foray into the world of venture capital since joining Red Cell Partners, a VC incubation studio.

Barnes, who spent 35 years at the NSA, including a stint as deputy director from 2017 to 2023, brings a wealth of experience in cybersecurity to the table. During his time at the NSA, Barnes was instrumental in the agency's ability to "penetrate our adversaries," which he believes has prepared him to be a better defender. This expertise will undoubtedly be valuable to Hunted Labs, which is tackling the critical issue of open-source software security.

Hunted Labs, founded by Hayden Smith, a veteran of various DoD projects, aims to address the pressing concern of unknown software contributors. The startup's solution is designed to help identify and mitigate potential security risks in open-source software, which has become an essential component of modern software development. The importance of this issue was highlighted in 2024, when a lone Microsoft engineer discovered a backdoor in xz Utils, a widely used piece of software included in almost every version of Linux.

Smith, who previously worked on the DoD's Platform One project, was inspired to create a commercial version of the background checking work he did for the project. He reached out to potential investors via cold emails, one of which caught the attention of Barnes. The former NSA deputy director was impressed enough to invite Hunted Labs into Red Cell's paid, three-month "discovery" period for its incubator.

During this period, Hunted Labs refined its product, landing customers and securing the $3 million seed investment from Red Cell. The startup has also secured a $1.79 million contract with the Space Development Agency, thanks to the DoD connections of Smith and co-founder Tim Barone. Notably, this deal did not come through Red Cell's network, demonstrating the founders' existing relationships within the DoD.

Hunted Labs' solution provides more traditional OSS software threat management, including identifying software in use and spotting vulnerabilities in the code. While the startup faces competition from established players like Black Duck Software, Mend.io, and Snyk, its unique approach and connections within the DoD could give it an edge in the market.

The investment marks an interesting development in the cybersecurity landscape, with a former NSA deputy director bringing his expertise to the private sector. As the importance of open-source software security continues to grow, Hunted Labs is well-positioned to make a significant impact in the industry.

In conclusion, the investment in Hunted Labs highlights the critical need for innovative solutions in the cybersecurity space. With Barnes' guidance and the startup's unique approach, Hunted Labs is poised to make a significant impact in the industry, helping to address the pressing concern of open-source software security.