citybiz+ Cybersecurity Startup Sepio Announces Series B Funding Round

Sepio, a security startup focused on protecting all physical IT assets, announced a Series B funding round, the Rockville, Md.-based firm’s first since 2019. The firm with roots in Israel has so far raised $37 million in venture capital since its founding in 2016.

U.S. Venture Partners led the recent unquantified funding round. Other investors included Citi Ventures, Stanford University, World Trade Ventures, Descope cofounder Slavik Markovich and Mark Wassersug, Intercontinental Exchange’s chief operating officer. Sepio Chairman Lane Bess, who took a Sepio-branded rubber ducky on Blue Origin’s first space flight with Jeff Bezos last year, also invested through his foundation, Bess Ventures.

Previous investors in the six-year-old startup include Hanaco Ventures, Munich RE Ventures, Merlin Ventures and Pico Partners.

“We are excited to continue our journey building a strong company that provides a robust…solution to tier-1 customers,” said Septio cofounder and CEO Yossi Appleboum, who designed critical infrastructure network monitoring and security systems for Israeli Army Intelligence (Unit 8200). “This provides a glimpse into more exciting developments we will unveil in 2022, 2023 and beyond.”

Strong Differentiation

Within the robust but highly competitive cybersecurity market, Sepio has differentiated itself by focusing on protecting all hardware assets in existence across a corporate network, rather than just those being actively used. Its risk management platform, called HAC-1, monitors all devices, even when they don’t show any data traffic.

“So many companies are focused on cybersecurity. But we specifically tapped into asset risk management from the beginning when this was an inexplicably overlooked area,” said Appleboum. “It has truly paid off. So many great minds are now recognizing asset risk management as a key cybersecurity challenge.”

Dafina Toncheva, USVP’s general partner who oversaw the firm’s investment in Sepio, said she was drawn by the startup’s novel focus. “We research many Israeli cybersecurity companies on a day-to-day basis at USVP but Sepio caught our attention because it narrowed in on a challenge that other companies do not devote significant resources toward fixing,” she said.

USVP, headquartered in San Francisco, has raised $2.2 billion from six funds. Its last fund was worth $340 million in 2020. The venture capital firm, founded in 1981, has made over 500 portfolio investments and exited a third. Its investing team claims a combined “150 years of operating experience and investment expertise.”

Experienced Management

citybiz+ Sponsors

Appleboum is a 25-year industry veteran, with wide experience in security, networking, computer science and control systems. Besides serving the Israeli army, he has entrepreneurial experience. In 1998, he cofounded WebSilicon, which was later acquired by Magal (Nasdaq: MAGS). Later, he served as the chief technology officer at Senstar, the North American division of Magal, and relocated to the United States to work more closely with key customers and partners.

citybiz+ Cohorts

Sepio’s chairpersons — Lane Bess and Monique Shivanandan – bring deep expertise and wide-ranging experience. Bess is an industry veteran who has served some of the best-known cybersecurity companies, including Trend Micro, Zscaler and Palo Alto Networks. Since September, he serves as the CEO of New York-based Deep Instinct, which is building an AI-based cybersecurity platform.

Shivanandan serves as the chief information security officer at HSBC. Previously she has worked at financial giants such as Chubb, Avaya and Capital One, and telecom firms such as BT and BellSouth.