Big Banks Pour Millions Into This Cyber Security Startup
Financial heavyweights are investing millions of dollars into a cybersecurity startup that aims to paralyze phishing attacks, in which hackers try to trick people into either revealing their login credentials, downloading viruses, or visiting sites laden with malicious software.
Big banks such as JPMorgan Chase (JPM), American Express (AXP), and HSBC (HSBC) are among the investors in a new $40 million round of funding for Menlo Security, a four-year-old firm. Other investors include Ericsson Ventures, General Catalyst, Sutter Hill Ventures, Osage University Partners, and Engineering Capital.
Menlo, fittingly based in Menlo Park, Calif. (also home to Facebook (FB)), protects customers through an approach it calls “web isolation,” whereby the company opens all emails, documents, attachments, and websites in a virtualized environment and then mirrors an image of the content back to end users. The approach differs from more frequently used sandboxing technology in that the “active” content, capable of running potentially malicious programs through a browser or stealing passwords, never has a chance, in theory, to touch an employee computer, even after it has been opened.
“The idea is if you never let anyone connect to outside content, you can stay clean,” says Menlo CEO and cofounder Amir Ben-Efraim. He previously worked at Check Point Software Technologies (CHKP), an Israeli cybersecurity firm, and founded Altor Networks, a data center security company acquired by Juniper Networks (JNPR) for $95 million in 2010.
“Menlo’s isolation platform provides a seamless user experience,” says Harshul Sanghi, managing partner at American Express Ventures, whose parent bank is also a customer. “The technology doesn’t allow any active content to touch the end point—nothing.”
American Express’s venture capital arm has invested in other financial tech and security firms, including fraud fighter Signifyd, mobile security firm InAuth (acquired by the bank for an undisclosed sum last year), data miner Enigma, and identity verifier Trulioo.
“Phishing has grown to be one of the most common threats to businesses across industries and geographies,” said Rick Smith, head of private investments at JPMorgan Chase, in a statement. Smith praised the startup for “helping to eliminate phishing attacks without disruption to our business.”
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Menlo has doubled its headcount over the past year to about 125 employees. Ben-Efraim said he intends to use the latest cash injection to expand internationally in markets like Asia and Europe. The company has raised about $85 million to date.
“We’re not playing a cat and mouse game with malware anymore,” Ben-Efraim says.