Advancements in artificial intelligence (AI) have made small and medium businesses (SMBs) prime targets for cybercrime, with estimates indicating they account for nearly half of all cyber breaches globally. Highlighting the growing demand for enhanced security solutions, Israeli startup Guardz has successfully secured $18 million in Series A funding to expand its innovative tools designed specifically for SMBs.
Emerging from stealth mode just under a year ago in January 2023, Guardz has refined its approach. Rather than selling directly to SMBs, the company now partners with managed service providers (MSPs), which offer IT services to SMBs. This pivot allows MSPs to incorporate Guardz's security tools into their existing offerings. “This is the journey. It’s a blended solution, powered by Guardz but branded by the MSP,” explained CEO Dor Eisner in a recent interview.
The fresh funding will be used to enhance the engineering team and further develop the Guardz platform, which primarily serves customers in the U.S., U.K., and Australia. Currently, Guardz is collaborating with approximately 200 MSPs, collectively reaching around 3,000 SMBs and serving approximately 36,000 seats with its products. The core of the business remains focused on security solutions, with cyber insurance offered as an additional layer.
The funding round is led by Glilot+, the growth fund of Glilot Capital Partners, alongside contributions from ClearSky and previous investors such as Hanaco Ventures, iAngels, and GKFF Ventures. While the company hasn’t publicly disclosed its current valuation, Eisner noted that it has tripled since its previous seed round of $10 million when Guardz first launched.
With this latest $18 million addition, Guardz has now raised a total of $28 million. As the company continues to grow, it sees significant opportunity in the global market, where over 150,000 MSPs cater to SMBs. This positions Guardz's valuation comfortably above $100 million.
Guardz is addressing a critical and urgent gap in the market. Historically, cybercriminals overlooked SMBs due to their fragmented nature and relatively lower potential for return on investment compared to large enterprises. However, advancements in AI have simplified how cybercriminals launch and scale attacks, leaving many SMBs vulnerable, often lacking both in-house expertise and the necessary tools to defend themselves.
Guardz seeks to level the playing field by providing a comprehensive security platform tailored for SMBs, complete with managed services that minimize direct customer management. The platform integrates AI-driven automation for detecting and responding to threats, as well as generating reports that can be analyzed by the MSPs. Additionally, MSPs can utilize Guardz for customized security breach simulations, designed to enhance employee training within their client organizations.
A portion of the funding will also focus on expanding the suite of tools available to Guardz’s team, ensuring they can counter the increasingly sophisticated methods employed by cybercriminals. “Every day we discover new tactics used by hackers,” Eisner noted. Recently, for instance, they identified a method allowing malicious actors to automate email forwarding rules in Microsoft 365, facilitating covert email collection. “We noticed discussions about this attack on the dark web and proactively developed detection and remediation strategies,” he added, noting that such techniques often accompany broader phishing strategies.
The growing interest in SMBs as a viable market for tech companies stems not only from improvements in cloud services and AI but also from the sheer size of the segment, which represents over 99% of global businesses. Notable players in this space, like the payments and fintech platform SumUp, recently announced over $300 million in funding to broaden its reach among SMBs. Guardz is not alone in the SMB cybersecurity realm; competitors include CyberSmart based in the U.K., and larger firms such as CrowdStrike and Check Point.
Lior Litwak, managing partner at Glilot+, remarked, “Upon meeting the outstanding team at Guardz, which combines cybersecurity experts with specialists in small business marketing, it became clear they had developed the ultimate solution for small business cybersecurity—addressing a critical and rapidly growing market need we’ve been monitoring for some time. Guardz offers an impressive, user-friendly cybersecurity and cyber insurance platform primarily designed for MSPs, catering to the often-neglected small business landscape. We’re excited to lead this funding round and support the Guardz team in their mission to strengthen digital security for those who need it most.”
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