In fact, though rogue AI agents dominate talk of the future, AI has already changed cybercrime for good, said Arjun Bisen, cofounder and CEO at digital threat detection startup Overwatch. 

“The chaos of today is underappreciated,” said Bisen, a former Australian diplomat who shaped the country’s cyber engagement strategy in the 2010s. “Cybercrime has just become so effective. You see stats that say cybercrime is the third-largest economy in the world after China and the U.S. I don’t know if those numbers are accurate, but there’s some attempt at quantifying it and it does sound scary. I think it’s not fully appreciated by the public.”

Cybercrime—from SMS phishing and ransomware to fake businesses moving real (and illicit) cash—has been with us in all sorts of forms since the earliest days of the internet. But Bisen has been watching as AI has made cybercrime faster, cheaper, and more interconnected. 

“Digital threats is a broad term because it can mean everything from cyberattacks to fraud to financial crime,” said Bisen. “Attackers are using AI to blend all those into one thing. A threat actor doesn’t say: ‘I’m going to do a cybersecurity exploit.’ They say: ‘I’m going to smash and grab, move money away.’ These silos of cybersecurity and money laundering and fraud, the idea that those are separate, that’s disappeared.”

In short, Bisen’s theory is this: As cybercrime increasingly overlaps into a digital threat rat-king, cyberattacks and fraud need to be addressed holistically and together, not in silos. In 2022, Bisen and Zara Perumal cofounded startup Overwatch, which builds and uses technologies (like AI agents) to help companies scale their defense against digital threats. Now, the New York-based company has raised a $15 million Series A, led by Mouro Capital and with participation from Visa Ventures and Capital One Ventures, Fortune has exclusively learned. Backers also include PruVen Capital, New Era Capital Partners, and Y Combinator. Visa, Capital One, Cash App, SoFi, Stripe, and DoorDash are all Overwatch customers, preparing for an era of anyone-can-do-it cybercrime. 

“The fact that AI has made scamming so cheap and fast—Mastercard even came out with a stat that it’s less than $3 now per attack—means it’s basically become zero barrier-to-entry,” Bisen told Fortune. “As much as we’ve all seen the scam messages, it’s actually way worse than even that suggests.” 

And I’m personally often awash with scam texts, the ones that ask for your credit card information, pretend to be a coworker, or invite you to a golf course (I have encountered all three increasingly). But AI has allowed all kinds of cybercrime to proliferate fast, including impersonation and automated attacks. One example of how quickly it can scale up: 

“One threat actor was able to launch over 100 attack campaigns in like five days, and compromised 27 payment sites,” said Bisen. “Then, they basically sat behind those payment sites, skimming all the credit cards that were being used on those sites—and harvesting them. I think they captured all the card details for over 600,000 cards.” 

Bisen has all kinds of stories like this. Stolen accounts, sometimes worth millions, come up regularly for him. He’s investigated real-seeming businesses, like bookshop websites and computer repair outfits—that ended up with links to gambling and, eventually, the movement of illegal cash. He’s even realized that this age of cybercrime has its own kind of enterprise software, from specialist tools for sending scam texts to software built to gather stolen login details. 

“Investors always tell me SaaS is dead,” said Bisen, “but it’s definitely not dead when it comes to the illicit economy.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com

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VENTURE CAPITAL

- Coast, a New York City-based provider of corporate cards and expense-management software for businesses with vehicle fleets and field workers, raised $35 million in growth equity funding. Thomvest Ventures led the round and was joined by Intuit Ventures, Small World Capital, Alpha Square Group, and existing investors.

- BioStack, a San Francisco-based provider of clinical data infrastructure and training datasets for medical AI, raised $9.5 million in seed funding from Peak XV, Afore Capital, DCVC, Emerson Collective, SV Angel, Verdict Capital, Streamlined Ventures, and Y Combinator.

- PreScalar, a San Francisco-based provider of a test and data platform for advanced manufacturing, raised $7 million in seed funding. Dynamo Ventures and BMW i Ventures led the round and were joined by Blue Wire Capital, Uplift Ventures, and Antler.

- BOB, a Miami, Fla.-based provider of an AI-powered finance and banking platform for small businesses, raised $5.5 million in seed funding. Mischief led the round and was joined by Peter Thiel, Codie Sanchez, Mark Pincus, Karman Ventures, and others.

- Epoch, a London, U.K.-based provider of AI-powered supply chain intelligence and compliance software, raised $4.3 million in seed funding. Burnt Island Ventures and Sand River led the round.

- Colare, a San Francisco-based provider of simulation-based technical assessments for hiring hardware engineers, raised $2.5 million in pre-seed funding from Afore Capital, Garage Capital, and Acadian Ventures.

PRIVATE EQUITY

- Commercial Bakeries, backed by Graham Partners, acquired Partners, a Des Moines, Wash.-based manufacturer of crackers and other baked goods. Financial terms were not disclosed.

- Dayforce, backed by Thoma Bravo, agreed to acquire Ribbon AI, a Toronto-based provider of AI-powered recruiting software that automates candidate sourcing, screening, and interviews. Financial terms were not disclosed.

OTHERS

- Midera Food Processing acquired Phoenix Innovations, a Russellville, Ark.-based designer and manufacturer of poultry processing equipment. Financial terms were not disclosed.

IPOs

- Lycia Therapeutics, a South San Francisco-based biotechnology company developing treatments for autoimmune, inflammatory, and allergic diseases, raised $318 million in an offering of 17.6 million shares priced at $18 on the Nasdaq.

- OPay, a Singapore-based digital banking and payments platform, plans to raise up to $336 million in an offering of 16 million ASDs priced between $19 and $21 on the New York Stock Exchange. The company posted $806 million in revenue for the year ended June 30. 

- Windward Bio Group, a Basel, Switzerland-based developer of antibody therapies for respiratory and dermatologic diseases, filed to go public on the Nasdaq. Novo Holdings, OrbiMed, Luca Santarelli, SR One, Omega Funds, RTW Investments, and Blue Owl Capital back the company.