As the number of machine identities continues to surge due to the growth of cloud and artificial intelligence (AI), cybersecurity startup Token Security has raised $20 million in Series A funding to tackle the resulting security risks. The funding round, led by Notable Capital (formerly Golden Gate Ventures) with participation from TLV Partners and executives from Palo Alto Networks, CrowdStrike, and Check Point, brings Token's total funding to $27 million.

The need for machine identity security solutions has become increasingly pressing, as evidenced by recent high-profile hacks. For instance, a 2023 hack of authentication app Okta was caused by exploiting a service account, while a 2024 hack of Microsoft was based on an old test account. These types of attacks highlight the vulnerability of machine identities, which can provide hackers with numerous entry points into an organization's systems.

Token Security's founders, Itamar Apelblat and Ido Shlomo, met while serving in Israel's Unit 8200 military intelligence unit, a breeding ground for cybersecurity startup founders. Apelblat, now CEO of Token Security, discovered the security risks of machine identities firsthand when he found an old service account for contractors still had full access across his entire organization. This experience sparked the creation of Token Security, which emerged from stealth earlier this year.

Token Security's platform is designed to automatically identify machine identities and assign responsibility for them across a company's entire tech stack. This enables customers to catch potential breaches before they occur, with most incidents involving outdated or excessively privileged credentials. According to Apelblat, "Hackers don't break in; they log in," emphasizing the importance of securing machine identities in addition to human identities.

The growth of machine identity security is driven by the fact that these types of accounts are often more vulnerable to hackers than human accounts. Unlike human employees, who typically undergo a thorough offboarding process when leaving a company, machine identities may not receive the same level of scrutiny, making them attractive targets for hackers.

Token Security's $20 million funding round will be used to relocate the company's headquarters from Israel to the United States, expand its platform's AI security capabilities, and grow its executive team. The US market offers a significantly larger enterprise security market than Israel, providing Token Security with a prime opportunity to scale its operations.

The machine identity security space is heating up, with Israel's Oasis emerging from stealth with $40 million in funding last year. The largest deal in the space occurred in 2024 when Israel's CyberArk acquired US firm Venafi for $1.54 billion. Token Security's funding round marks a significant milestone in the company's mission to address the growing machine identity security risks in the cloud and AI era.

As the number of machine identities continues to proliferate, the need for effective security solutions will only intensify. With its innovative platform and significant funding, Token Security is well-positioned to play a leading role in shaping the future of machine identity security.