- AI startup Reco just raised a $25 million extension round from Insight Partners and other investors.
- The startup provides a SaaS security platform that uses AI agents to secure companies' software.
- As companies embrace AI tools, startups are creating security software to keep their platforms safe.
Reco, which uses generative AI and AI agents to provide businesses with an SaaS security platform, just raised more funding.
The startup told Business Insider exclusively that it secured a $25 million Series A extension from Insight Partners, Zeev Ventures, Boldstart Ventures, Angular Ventures, and Redseed.
The startup originally raised a $30 million Series A in 2022, led by Insight and Zeev. In total, Reco's has raised $55 million from VCs.
Investors are clamoring to back AI security startups following Google's historic $32 billion acquisition of cybersecurity startup Wix.
Founded in 2020 by Ofer Klein, Gal Nakash, and Tal Shapira, Reco is working to fix the "SaaS security gap," which Klein, the startup's CEO, explains is the gap that exists between a company's existing cybersecurity protections and the rapidly advancing tech — which, these days, is mostly AI — that employees are using, often without proper oversight.
To solve the problem, he linked up with co-founders Nakash, who previously headed up research at the Office of the Prime Minister in Israel, and Shapira, a machine learning ph.D. who also worked in Israel's Office of the Prime Minister.
Klein is based in Orlando, while Nakash and Shapira both live in Tel Aviv, according to their LinkedIn profiles.
Klein explained that the market has undergone a huge change during the last few years. Most companies have changed their policies from banning employees from using AI tools in the workplace to embracing them.
"AI and gen-AI agents are amazing for the business and not something you can block anymore," he said. "Banks, insurance companies, and healthcare are all starting to adopt it, but the only way to adopt it is to have the right visibility and security for it."
That's where Reco comes in. The startup helps companies keep their cloud apps safe — especially ones that employees use without telling IT, like a random tool they download and try out. As enterprises rely more and more on apps, it's easy to lose track of who's using what, which can open the door to security risks. Reco's AI finds the apps, monitors how they're being used, and flags risks before they become big problems.
Klein added that Reco has spent the last two and a half years building AI agents that can quickly understand and fix app issues. The AI agents are trained on Reco metadata rather than customer data, making them faster and more secure than competitors on the market.
"We could foresee an AI revolution, and having thousands of AI applications is amazing, until you get to the problem of, 'I'm a security expert, and I don't have any visibility'," Klein said. "Our vision has been to empower teams and enable businesses so that security feels like innovation."
Reco is one of many startups using AI to help enterprise customers beef up their cybersecurity offerings.
Tel Aviv-based Torq, a no-code security platform, raised a $70 million Series C funding round in 2024 led by Evolution Equity Partners with participation from Bessemer Venture Partners. 7AI, which is building a "swarm" of AI cybersecurity agents, launched from stealth in 2024 with a $36 million seed round led by Greylock. And Astrix Security, which uses AI agents to shield enterprise customers from cyberattacks, raised a $45 million Series B in 2024 led by Menlo Ventures.
