Investors’ excitement in broad market traction brings total funding in one year to $17M
One year after emerging from stealth, Karamba Security, a provider of autonomous cybersecurity solutions for connected and autonomous vehicles, has shifted the paradigm of automotive cybersecurity from detection to prevention with manufacturers, OEMs and Tier-1 suppliers. The move has attracted $12 million in Series B funding to accelerate its growth.
The new round, announced today, brings Karamba’s total funding amount to $17 million within 15 months. The new funds will be used to meet the rapidly growing demand for Karamba’s solutions by expanding resources in customer support, sales and R&D.
The B round is co-led by existing investors YL Ventures and Fontinalis Partners with strategic investments from: • Paladin Capital Group, a multi-stage investor in cybersecurity solutions for government and commercial markets • Liberty Mutual Strategic Ventures; the early stage venture capital arm for Liberty Mutual’s U.S. Consumer Markets business • Presidio Ventures, the early stage investment vehicle of Sumitomo Corporation and • Asgent, Inc., a Tokyo Stock Exchange-traded provider of network security operations management solutions
No strategic investor was granted a board seat. Previously, Fontinalis led an A round of $2.5 million round with YL Ventures and GlenRock. YL Ventures provided $2.5 million in early stage seed funding. After white hat hackers repeatedly demonstrated they could successfully exploit security bugs in a connected car’s code to infiltrate its safety systems, the FBI, Department of Transportation, and the National Highway Traffic Safety Administration issued a Public Safety Alert that highlighted the dangers to new and existing cars on the road that jeopardize people’s lives.
They warned today’s vehicles are “increasingly vulnerable to remote exploits” that allow a hacker to “manipulate critical vehicle control systems,” potentially even from nation-state actors. “Car security is about consumer safety, not data security,” said Chris Inglis, managing director of Paladin Capital Group and former deputy chief of the DoD’s National Security Agency. “We are entering a new era in cybersecurity which demands a new approach to not only nationstate hacktivism and national security, but also protecting cars from cyberattacks to safeguard people’s lives.”
Russ MacTough, managing director at Liberty Mutual Strategic Ventures, agrees. “As a major insurer, we are extremely concerned about cyberattacks in the automotive world. Not only is it a consumer safety issue, but any incident could also burden car manufacturers with recall costs and owners with increasing premiums against the risks,” he said. CEO Ami Dotan and chairman David Barzilai co-founded Karamba Security with a unique approach to automotive cybersecurity software leveraging the talent and innovative technology of their Israeli team’s cyber defense and intel expertise.
Karamba’s technology is designed to seal off a car’s infotainment system, GPS device and roadside assistance program by locking down code at the electronic control unit (ECU) level to ensure that only legitimate, factoryauthorized programs can run and everything else is blocked. By blocking access to those entry points it prevents cyberattacks from any intruder trying to reach critical driving functions like the steering, ignition and brakes. Within 15 months, Karamba engaged with 16 automobile OEMs and Tier-1 suppliers and was chosen as the cyber prevention vendor of choice by one OEM and a Tier-1 for detection and prevention.
The company was recognized with the 2017 North American Frost & Sullivan Award for Automotive New Product Innovation. “We make sure that only what’s part of the factory settings can run,” said David Barzilai, Karamba’s co-founder and executive chairman. “Once we recognize foreign code, we prevent it from executing, effectively blocking any attack. Our deterministic approach stands in sharp contrast to network-based solutions that rely on probabilities to try to identify attacks in progress and block them, an unreliable technique that creates safety risks by potentially blocking legitimate commands.” “We’re delighted to have YL Ventures and Fontinalis Partners continue their steadfast investment in Karamba Security while having Paladin, Sumitomo, Liberty Mutual and Asgent come on board,” said Dotan. “Their commitment to Karamba Security demonstrates that our solutions are the optimal choice for meeting consumer safety and the automobile industry’s urgent security concerns.”