BreachBits, an old-fashioned garage startup in suburban Maryland, has raised a seed round led by Vienna, Va.-based Blu Venture Investors, as it develops authoritative cyber risk ratings and advanced predictive intelligence.
Also investing in the round was Washington, D.C.-based BlueWing Ventures, So far, the Annapolis, Md.-based startup has raised $3.2 million, according to Crunchbase.
Cyber Veterans
After years of being on the front lines of cyber warfare, U.S. military and intelligence veterans John Lundgren and J. Foster Davis co-founded BreachBits in 2018, with a pledge to deliver world-class cyber risk insights continuously at scale.
“When cyber risk matters to your organization, how you measure that risk matters,” said Lundgren, a 17-year US Navy veteran who leads BreachBits. “Think of our approach as inviting a team of experts to thoroughly test the locks, windows and alarms like a burglar would,” he added.
In 2021, the company unveiled a platform called BreachRisk, which evaluates organizations’ exposure to cyber risks and delivers an easy-to-understand ratings. It is touted as an automated penetration testing-as-a-service, or PTaaS, that businesses can use to monitor threats across their subsidiaries, business units and vendors. Users can also share results with others, for example, to meet compliance.
Broadening Access
BreachBits is democratizing access to automated penetration testing, which was once a “very manual, expensive and time-consuming service,” according to Blu’s principal, P.K. Malhotra. “We’ve heard first-hand how easy and valuable it is for their customers, and we are proud to support BreachBits in its next phase of development,” said Malhotra, who is a member of Blu’s cyber fund investment committee.
“Our method of using automated penetration testing to measure risk has resonated with customers,” said Davis, who serves as BreachBits’ chief operating officer. Customers are gratified when they see their ratings improve after they make changes to neutralize risks identified by our platform, added Davis, who, among other things, was adjunct professor of cybersecurity at the U.S. Naval Academy.
BreachBits has conducted over 4 million offensive security tests and provided intel of over 87,000 viable attack paths to customers in eight countries.
“The ability to scale such rigorous and accurate assessments is going to be a game-changer for the cyber risk quantification market,” said Richard Chilton, managing partner at BlueWing Ventures.
Tech-focused VC
Blu, founded in 2010, has invested nearly $100 million in nearly 100 startups, focusing on SaaS and technology ventures. Its most recent fund of $25 million was raised in 2021. Blu’s recent portfolio investments include Elidah, Enveedo, PediaMetrix and N5 Sensors.
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J.S. Gamble, one of the firm’s founders, serves as its managing partner. He previously worked at consulting firms McKinsey and Price Waterhouse. Gamble briefly served as acting CEO of Smart Imaging Systems, and has been an adviser to several portfolio companies. He is an adjunct professor of entrepreneurship at the McDonough School of Business at Georgetown University.
Blu partner Malhotra previously served as the chief operating officer of Optum Government, a UnitedHealth Group unit that provides healthcare services for federal and state customers, and chief financial officer of Optum International. He came to UnitedHealth with the acquisition of QSSI, a software development and IT infrastructure firm. Malhotra has also served as an equity research analyst for a number of Wall Street firms, including Legg Mason, CIBC World Markets and SG Cowen.
Blu’s cyber investment committee also includes Tarun Upaday, a serial entrepreneur who now helms Bethesda, Md.-based Routespring, the business travel firm he co-founded. Upaday also co-founded Trafla, hCentive, GlobalLogic and Pinelabs. He is a graduate of IIT, India’s premier tech school.
