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AI security startup Reco has raised a $25 million Series A extension to further develop its platform designed to close the widening SaaS security gap.

The round, led by Insight Partners, included participation from Zeev Ventures, Boldstart Ventures, Angular Ventures, and Redseed, bringing the company’s total funding to $55 million.

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Reco Expands Funding to Strengthen SaaS Security Innovation

Founded in 2020, Reco is building a next-gen security solution that uses generative AI and AI agents to protect cloud applications, especially those used outside of IT’s watchful eye.

The company first raised $30 million in 2022 in a Series A round also led by Insight and Zeev.

“AI and gen-AI agents are amazing for the business and not something you can block anymore,” said CEO Ofer Klein in a statement to Business Insider. “The only way to adopt it is to have the right visibility and security for it.”

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Solving the SaaS Security Gap

Reco’s mission centers on closing what Klein calls the "SaaS security gap"—a growing divide between traditional cybersecurity measures and the fast pace of AI adoption in modern workplaces.

Klein teamed up with co-founders Gal Nakash and Tal Shapira to tackle this issue. Nakash formerly led research for the Israeli Prime Minister’s Office, while Shapira holds a Ph.D. in machine learning and also worked for the Israeli government. Klein is based in Orlando, while Nakash and Shapira reside in Tel Aviv.

“We could foresee an AI revolution,” said Klein. “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.’”

AI Agents Built for Enterprise Security

Reco’s platform is powered by proprietary AI agents that are trained on Reco metadata, not customer data, making them faster, more secure, and more private than conventional solutions. These agents are built to detect and assess risky software behavior before it becomes a threat.

The tool especially focuses on shadow IT, where employees install apps independently of their IT departments. Reco identifies these tools, monitors their usage, and flags any associated risks automatically.

“Our vision has been to empower teams and enable businesses so that security feels like innovation,” said Klein.

A Growing AI Cybersecurity Ecosystem

Reco is part of a rapidly expanding field of AI-powered cybersecurity startups. In 2024 alone:

• Torq, a no-code security automation company, raised $70 million in a Series C round.
• 7AI, which uses a “swarm” of AI agents, emerged from stealth with $36 million in seed funding.
• Astrix Security closed a $45 million Series B to protect enterprises from AI-driven cyber threats.
  These companies reflect a broader trend where enterprise tech is embracing AI-driven solutions to manage complex, dynamic digital environments.

Reco’s Momentum