CyberFortress Adds $3M Seed Round for Cybersecurity Insurance Tech
San Antonio—[Updated 12:22 p.m. See below.] CyberFortress, a cybersecurity company focused on the insurance industry, closed a $3 million seed funding round co-led by New York venture firm Greycroft and Austin, TX-based LiveOak Venture Partners.
Founded in 2018 in San Antonio, CyberFortress is still developing its product, which will insure e-commerce businesses. The company’s plans would cover small businesses for events like loss of cash—if, for example, an e-commerce company’s website is hacked, preventing it from making sales, or if an employee of a startup makes a large, fraudulent payment to a phishing scheme, CEO Hew Edwards told Xconomy last year.
Current insurance options are more targeted toward large enterprises that have enough free cash flow to possibly handle a loss like that, Edwards said in 2018. It’s harder for smaller companies to survive a similar circumstance, he said. The company uses a service it developed called Downtime Risk Assessment to determine how at-risk a customer might be to something like a distributed denial-of-service (DDoS) attack or ransomware. It uses machine-learning algorithms to collect and study data from a business’s domain name and other aspects of how the business uses technology.
The business expects to use the new funds for hiring people on its product development team before it launches its service in Texas, which it expects to happen in 2020. Prior investor Monte Tulum Capital also invested in the company’s seed round.
CyberFortress received its “pre-seed” funding from Portcawl Holdings, an investment firm Edwards co-founded with Bret Piatt, the CEO of San Antonio-based Jungle Disk. Portcawl also purchased and spun out Jungle Disk, a data backup and cybersecurity company, from cloud computing business Rackspace in 2016. Edwards was working as the chief financial officer of Jungle Disk when he and two other employees of the cybersecurity company, Michael DeFelice and Nate Shames, left to run CyberFortress. [Updated to clarify Piatt’s involvement with Cyberfortress and who are the company’s founders.]