Cybersecurity Innovator SpyCloud Secures $30 Million

Account takeover (ATO) prevention specialist SpyCloud locked in $30 million in Series C funding today. The round, led by Centana Growth Partners, featured participation from all of the company’s existing investors, a list that includes Altos Ventures, March Capital Partners, Silverton Partners and M12, Microsoft’s venture capital fund. This week’s funding takes SpyCloud’s total capital to $58.5 million.

“Criminals work together to steal information and find creative ways to monetize it. As a result, even the most careful and sophisticated organizations are vulnerable,” SpyCloud CEO and co-founder Ted Ross said. “SpyCloud will continue to pursue new and innovative ways to stay ahead of criminals and provide solutions that make the internet a safer place for individuals and businesses.”

SpyCloud made its Finovate debut in the fall of 2017, earning a Best of Show award for its exposed credential monitoring and alert service. The company, based in Austin, Texas, finds and recovers stolen and compromised assets that are actively trading on the digital underground, capturing 40 million exposed assets a week using techniques that go beyond web crawlers and other automated solutions.

This spring, SpyCloud partnered with security operations platform ThreatConnect, integrating its database with two of ThreatConnect’s offerings. More recently, the company teamed up with third party risk management platform Privva, and worked with MENA-based information security valued added distributor Spire Solutions,

One of the more interesting partnerships SpyCloud announced this year was a collaboration with Zero Trafficking, a company that provides solutions to combat human trafficking. Taking advantage of the fact that the bad guys are as likely to suffer from the same data breaches and stolen credentials as everyone else, SpyCloud has leveraged its technology to help Zero Trafficking round them up.

“Billions of data assets per year are exposed in breaches, including assets belonging to criminals,” SpyCloud Head of Investigations Jason Lancaster explained. “By drawing on the 100+ billion assets SpyCloud has recovered from third-party breaches, Zero Trafficking can piece together criminals’ digital breadcrumbs to uncover the identities of specific adversaries engaging in human trafficking activity.”

Photo by Clem Onojeghuo from Pexels

SpyCloud Integrates with ThreatConnect to Help Stop Account Takeover Attacks

Photo by Noelle Otto from Pexels

A new partnership between intelligence-driven security operations platform ThreatConnect and account takeover prevention solution provider SpyCloud will help individuals take action during the critical time between credential exposure and account breach.

Two of ThreatConnect’s solutions – its Security Orchestration, Automation, and Response (SOAR) and Threat Intelligence Platform (TIP) work jointly to help spot and respond to potential cyber threats. Adding Spycloud’s database of exposed credentials will enable ThreatConnect to more comprehensively scan for personally-identifiable information – email addresses, usernames, passwords, and more – that may be exposed and available for exploitation by cybercriminals and fraudsters shopping for credentials on the dark web.

“Our customers know that poor user password habits put accounts at risk,” ThreatConnect Integrations Product Manager Richard Cody said. “Having access to SpyCloud’s dataset through our platform means they can detect and remediate credential compromises before account takeover attacks begin.”

Austin, Texas-based SpyCloud earned a Best of Show award for its FinovateFall demonstration of its Exposed Credential Monitoring and Alert service. SpyCloud uses human intelligence-gathering strategies to identify and recover stolen assets from threat actors and private sources before they are traded on the dark web. As a result of this approach of going beyond automated solutions and webcrawlers, the company’s technology has resulted in the capture of 40 million exposed assets every week. In addition, SpyCloud also helps protect company employees from future account takeover attacks via its integration into their current authentication system.

“The data we provide to ThreatConnect customers through this partnership will not only allow them to prevent damaging account takeover attacks, but should also give them a better understanding of credential management habits among their employee and customer bases,” SpyCloud Chief Strategy Officer Chris LaConte explained. He added that making password remediation automatic and relying on NIST (National Institute of Standards and Technology) guidelines for strong, secure passwords are key components of robust cybersecurity and reducing the risk of data breaches.

Last fall, SpyCloud introduced a new suite of automated solutions to support password security maintenance in Microsoft Active Directory. The company has raised more than $28 million in funding, most recently securing $21 million in a round led by Microsoft venture fund, M12. Ted Ross is CEO and co-founder.

Finovate Alumni News


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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News


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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News


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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

SpyCloud Scores $21 Million in Round Led by Microsoft’s M12

Account takeover (ATO) prevention specialist SpyCloud has raised $21 million in funding in a round led by Microsoft’s venture fund, M12. And if there’s one phrase to describe how the company plans to spend the new capital, it’s “we’re hiring.”

SpyCloud announced in a blog post accompanying the funding announcement that it will be adding to its current security research, development, and sales and marketing teams. The Austin, Texas-based company also said it plans to expand to new markets around the globe.

“We are excited and optimistic about what this new round of funding will do for SpyCloud and the world at large,” the post read. “With this money, we are more confident than ever that as criminals scale their methods to collect and weaponize compromised passwords, SpyCloud will be able to go toe-to-toe with even the most sophisticated of them.”

Existing investors Silverton Partners and March Capital Partners also participated in the Series B round, which boosts SpyCloud’s total capital to more than $28 million.

Left to right: SpyCloud Chris LaConte (Head of Business Development) and Tedd Ross (CEO and co-founder) demonstrating the company’s Exposed Credential Monitoring and Alert Service at FinovateFall 2017.

SpyCloud differentiates its cybersecurity offering in a number of ways, such as featuring human experts at the center of its account takeover prevention capabilities rather than relying on an automated solution. The company deploys what it calls “multi-tiered, underground intelligence gathering techniques” to provide a critical additional step in finding stolen credentials before they are sold on the underground markets of the dark web.

The company’s 60 billion asset database of exposed credentials and personally identifiable information (PII) is also a major asset. Last year, SpyCloud recovered and analyzed 3.5 billion sets of online credentials from nearly 3,000 data breaches and other sources from the dark web – including 2.6 billion credential sets with a password. Adding to its development team, the company noted, would enable it to both enhance its password cracking capabilities, as well as add to its API integrations and Active Directory Protection for automated Windows domain protection.

“Passwords and their reuse across personal and work accounts are the leading cause of ATO, one of the most imminent threats to businesses of all sizes,” SpyCloud co-founder and CEO Ted Ross said. “As criminals use more complex, scalable methods to collect and weaponize compromised passwords, organizations need to take proactive measures to prevent, detect, and remediate exposures. SpyCloud meets that immediate need.”

Founded in 2016, SpyCloud demonstrated its Exposed Credential Monitoring and Alert Service at FinovateFall 2017 – winning Best of Show. Last spring, the company announced that it was partnering with fellow Finovate alum Credit Karma, just one month after announcing a $5 million Series A round led by Silverton Partners and March Capital Partners.

Finovate Alumni News


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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Credit Karma Partners with SpyCloud to Add Dark Web Data Monitoring

Not long ago, a poster at the Credit Karma Credit Advice forum wrote:

I’ve been seeing links to see if my personal data is on the “dark web.” Is this something Credit Karma can do?

Now we know the answer to that question is “yes.”

Credit Karma has expanded its identity theft monitoring offering to include data from the dark web. Courtesy of a partnership with fellow Finovate alum – and Best of Show winner – SpyCloud, Credit Karma will dramatically increase the number of data breaches it is able to review for its 80 million users. Currently searching 4.5 billion public breaches, the new service will boost the total number of data breaches searched to 13 billion.

Vice President of Data Products Anish Acharya explained to TechCrunch that the decision to offer the dark web data breach search service was important for its users, and that a “pervasive” problem like identity theft from data breaches required a “comprehensive” solution. Credit Karma users can access the dark web monitoring service via the app in the ID Monitoring option in the Settings menu. The service can be accessed online via the Resources tab at the company’s website.

Credit Karma’s move comes less than a year after the company introduced its free identity monitoring service. This service provides users with monitoring, notifications, and advice such as how to report fraud, freeze their credit, or change their passwords. It adds to the free credit monitoring and personalized financial recommendations that has been the Credit Karma’s stock in trade since the company provided its first free credit score in 2008.

“Over the last ten years, you’ve come to rely on us as we continue to look for ways to help you save money and stay on top of your financial identity, and we take that trust seriously,” Credit Karma Product Manager Adam Boender wrote on the company’s blog when the new service was announced last fall. “As part of our mission to be your financial assistant, it made a lot of sense for us to build and provide ID monitoring as data breaches have become more prevalent.”

Last month, Credit Karma announced a $500 million secondary investment from Silver Lake that boosted its valuation to $4 billion. Named to the Forbes Fintech 50 in February, Credit Karma began the year partnering with American Express to offer tax refund advances. Credit Karma is one of Finovate’s earliest alums, demonstrating its technology at FinovateStartup 2009. The company is headquartered in San Francisco, California, and was founded in 2007. Kenneth Lin is CEO.

Making its Finovate debut at FinovateFall 2017 – and earning a Best of Show award – SpyCloud protects businesses and their customers from account takeover (ATO) attacks – a form of cyberfraud that is increasingly common due to the widespread reuse of passwords. The company’s solution protects Windows accounts from takeover automatically and leverages its rich dataset to launch new fraud investigations of potentially exposed customer and employee accounts, including those compromised credentials being actively traded on the dark web.

Founded in 2016, Austin, Texas-based SpyCloud has recovered more than 32 billion breached assets and more than 500,000 C-level executive records. The company’s technology recovers six million credentials a day and more than 50 breached databases per week. Read our feature on SpyCloud from last fall, SpyCloud Spots Stolen Credentials with Deep Dives into the Dark Web.

SpyCloud Lands $5 Million in Funding

Security breach detection and account takeover prevention service SpyCloud recently brought home $5 million in funding. The Series A round comes courtesy of existing investors Silverton Partners and March Capital Partners. This brings the Austin-based company’s total funding to $7.5 million.

SpyCloud helps prevent account takeovers by proactively identifying exposed accounts as early as possible so that businesses can force password changes for vulnerable accounts before fraudsters take action. The company will use the new funds to fuel product development, conduct deeper security research, expand its database of assets, and grow its team.

The company was founded in 2016 and emerged from stealth mode a year later. Since that time, SpyCloud has compiled a database of 32 billion exposed accounts, leaked passwords, and pieces of personally identifiable information; it adds billions of new account data points every month. This data repository is available to service providers via an API to help prevent customer account takeover. SpyCloud has protected tens of millions of accounts for notable companies across a variety of industries, including finance, retail, and healthcare.

“There isn’t a company in the world that doesn’t run the constant risk of having its employee or customer accounts exposed, and that leads to a host of other issues,” said Ted Ross, CEO and co-founder of SpyCloud. “The only chance businesses stand against these increasingly-proficient criminals is to know as soon as possible which accounts have been exposed and to take preventative measures well before credentials make it onto the dark web.”

SpyCloud CEO and Co-Founder Ted Ross, along with Head of Business Development, Chris LaConte, gave a Best of Show-winning presentation at FinovateFall 2017. The company also has the honor of winning the NATO Communications and Information (NCI) Agency Defense Innovation Challenge. We published a profile on SpyCloud, along with an interview with Ross, last fall.

Finovate Alumni News


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  • The Faves of FinovateSpring: A Brief History of Best of Show Winners

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This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

SpyCloud Spots Stolen Credentials with Deep Dives into the Dark Web

Of all the anxieties of cybersecurity, the spectre of your personal credentials sitting in some digital warehouse on the dark web is probably near the top of the list. Every breach we read about in the news, whether it is at a retail business, a financial institution or even a government agency, brings this fear back the fore.

SpyCloud, a cyber security firm out of Austin, Texas that won Best of Show in its Finovate debut last month, takes a unique approach to this problem. The company’s Exposed Credential Monitoring and Alert Service, on display at FinovateFall, enables both institutions and individuals to find out if their exposed credentials are being actively traded on the dark web.

Left to right: SpyCloud Head of Business Development Chris LaConte and CEO and Co-Founder Ted Ross demonstrating the SpyCloud Exposed Credential Monitoring and Alert Service.

SpyCloud’s current focus is on providing its technology to the enterprise, especially in the financial, technology, and healthcare sectors. These verticals have been repeatedly targeted by cybercriminals who use techniques such as “credential stuffing” – in which stolen account credentials are used to access user accounts in large-scale, automated login requests – to compromise employee and consumer accounts, alike.

SpyCloud’s solutions and services include:

  • Corporate Credential Exposure Notifications that provide matching historical breach exposure instantly and include SpyCloud’s monitoring of the underground for stolen assets.
  • ATO (Account Takeover) for Employees which provides an Active Directory monitor tool for a single device and automatically compares new stolen credentials to a list of active users.
  • ATO for Customers which integrates the SpyCloud API into the customer login to identify customers with exposed credentials

Additionally, SpyCloud’s technology helps identify users that have been exposed to credential-stealing malware, resetting accounts or initiating further security precautions. The company also provides support for investigators via data mining through tools such as Maltego.

With our focus on security this month, we thought SpyCloud’s innovative approach – including actually interacting with the dark web’s nefarious characters to learn more about their tactics and strategies – was worth learning more about. After speaking with Ted Ross, CEO of SpyCloud, during the week of FinovateFall 2017, we followed up with a few questions by e-mail. Here are our questions and his responses.

Finovate: You began your Best of Show-winning presentation with a question about how secure we believed our personal credentials to be? Why start the conversation about security at this point?

Ted Ross: I started with this question because credential theft is a problem that affects people on a personal level – not just at work. Those who do not work in the cybersecurity space, are not regularly thinking about how exposed their credentials may be. It’s not until large-scale breaches like Equifax, Yahoo, etc. that most people begin thinking about their PII being in the hands of the wrong people. Our job is to not only educate companies on their employee and customer exposure, but to proactively alert to prevent any repercussions that may come from compromised personal credentials.  

Finovate: We are seeing a lot of new responses to the challenge of cybersecurity. SpyCloud’s approach seems unique– How did you come up with the idea?

Ross: A few years ago, I noticed the increasing trend of 3rd party data breaches and realized how these credentials put unsuspecting organizations and individuals at risk. I also realized that there wasn’t an effective solution to stop this problem. Most solutions to address this problem were/are heuristic or behavior-based solutions. From experience, behavior-based technologies are prone to false positives.  There was a need for a solution that compares existing credentials to exposed credentials with “an exact match”. No false positives, no calls to the help desk and can gracefully snap into and improve behavior based solutions.

Finovate: What is “human intelligence tradecraft” and how does it help you “interact with the bad guys and capture the information they are stealing before they post it to public forums or paid sites”?

Ross: Human intelligence (HUMINT) tradecraft is essentially the techniques, tactics and procedures used by our research team to social engineer threat actors. We don’t share details of our tradecraft for operational security reasons. At a high level, the tradecraft is used to infiltrate and maintain connections to covert threat groups/actors. We make use of HUMINT to gain access to stolen information before it can be posted to a public forum or sold/traded on the underground. Our goal is to recover this information before it can be used against our customers.

Finovate: Just how bad is the problem of stolen credentials on “the underground” as you called it? Is the problem getting worse?

Ross: The problem is getting much worse. It’s easy to see how the problem has progressed over the last 5 years with our breach timelines. When customers add their domains, they can see the number of 3rd party breaches that contained credentials that map to their employees. They can see that between 2011-2014, they were impacted by one or two breaches a year. Now, we are finding 10 new breached databases (from private sources – you won’t read about these in the press) every working day! We find so many credentials that we typically ingest about 40 million new credentials every week (and this is after we scrubbed out the duplicates). At this point, we have credentials for just about every enterprise with a digital presence. 

Finovate: What about your background encouraged you to tackle this challenge, particularly as it related to cybersecurity in financial services?

Ross: Having built a threat sharing platform in a past role, I was able to experience the various threat feeds that are available today. Most of them revolve around Indicators of Compromise (IoCs).  Something that requires a trained cyber security professional to create and use. In parallel, companies are looking for solutions that are easy to understand, easy to operationalize, effective, and priced fairly.  We created SpyCloud to address these issues. Our solution helps global enterprises, large financial institutions as well as smaller organizations and individuals. We realized up front that if it helped individuals at a personal level, then the aggregate would be something that is important for financial organizations. In aggregate, we are in a strong position to protect any organization with an online presence (i.e., financials and retailers) from customer account takeovers.     

Finovate: What’s next for SpyCloud? What are the company’s plans over the balance of 2017 and heading into 2018?

Ross: We’ve experienced tremendous growth in 2017 and don’t see that slowing down. Our Q3 results exceeded expectations. Among our enterprise wins this year, we brought on four of the largest companies in the world (within their respective industries). Q4 looks to be even stronger than Q3 and our pipeline is growing at somewhat unbelievable rates. Going into 2018, we are hiring additional security researchers and developers. In 2018, we have a few new surprises for our customers – something that will significantly strengthen their security posture while maintaining our core tenants of easy to use, highly effective and priced to be disruptive.   

SpyCloud CEO and founder Ted Ross and Head of Business Development Chris LaConte demonstrating SpyCloud Exposed Credential Monitoring and Alert Service at FinovateFall 2017.