Cynomi’s founders have announced plans to utilize the $37 million raised in their recent Series B funding round to enhance the AI and automation features of their virtual CISO platform. This effort is aimed at managed security service providers (MSSPs) and managed service providers (MSPs), along with expanding their footprint in the U.S. and Europe. Founded in 2020, the Israeli startup revealed its latest funding milestone this week.
Co-founder and CEO David Primor highlighted the company’s impressive growth trajectory, noting a 4.5X surge in annual recurring revenue for 2023, following a 3X growth in the prior year. He pointed to the increasing demand for cybersecurity and compliance services, especially among small and medium-sized businesses (SMBs) that often lack the resources needed to address rising cyber threats and regulatory demands. “This has created a significant opportunity for service providers, provided they can scale effectively,” explained Primor in a recent blog post.
Strengthening Partnerships
The $37 million funding round, co-led by Insight Partners and Entrée Capital along with participation from existing investors such as Canaan, Flint Capital, and S16VC, will allow Cynomi to broaden its partnership ecosystem. Presently, the focus has been primarily on MSSPs, MSPs, consultancies, and telecom companies; however, the company plans to engage additional service providers including integrators and resellers.
Commitment to Partner-Focused Model
Despite this renewed emphasis on partnership expansion, Cynomi’s market strategy remains unchanged, according to co-founder and COO Roy Azoulay. “We operate solely through a partner-based model with service providers, which is central to our business strategy,” Azoulay stated. The company is now collaborating with a major European telecom’s service arm while maintaining its commitment to a fully partner-driven model.
The Rise of vCISO Services
Cynomi provides an AI-enhanced vCISO service tailored for MSSPs and MSPs catering to SMBs and mid-sized enterprises. The vCISO concept allows businesses to access seasoned security professionals as consultants, avoiding the costs associated with full-time executives. The global vCISO market is projected to grow from $1.06 billion in 2023 to $1.48 billion by 2032, driven by the escalating complexity of cyber threats and the increasing number of security regulations.
Growing Demand for vCISO Programs
Cynomi has noted a significant uptick in interest for vCISO services. A 2024 survey among MSSP and MSP executives revealed that 21% already provide vCISO programs, with nearly 98% intending to do so. Approximately 94% of respondents reported increased customer demand for such services, while 59% who had introduced these offerings saw boosts in both revenue and profit margins.
Advancements in AI Capabilities
At the core of Cynomi’s platform is its AI technology, which automates the creation of risk and compliance assessments, gap analyses, policies, and remediation plans. The company is now focusing on enhancing its agentic AI capabilities. According to Azoulay, “Our AI functionalities will enable human analysts to delegate increasingly complex tasks to autonomous agents, freeing up experts to concentrate on strategic initiatives.” This investment will facilitate the development of new features and deeper integrations, expediting the rollout of enhanced functionalities.
