Reco Raises $30M Series B to Expand AI-Powered SaaS Security Platform

Israeli cybersecurity startup Reco has raised $30 million in Series B funding led by Zeev Ventures, bringing its total funding to approximately $85 million. The company specializes in AI agents that monitor Software-as-a-Service (SaaS) environments for security threats, addressing the growing challenge of "Shadow AI" usage and increasing regulatory scrutiny in enterprise settings.

The Funding and Market Context

The latest funding round comes at a critical time when enterprises are grappling with the security implications of widespread SaaS adoption. As organizations increasingly rely on cloud-based applications, the attack surface has expanded dramatically, creating new vulnerabilities that traditional security tools struggle to address.

Reco's platform uses artificial intelligence to continuously monitor SaaS environments, detecting anomalous behavior, unauthorized access, and potential data exfiltration attempts. The company's approach focuses on understanding the context of user activities across multiple SaaS applications, rather than relying on static rule-based detection methods.

The Shadow AI Challenge

One of the key drivers behind Reco's growth is the phenomenon of "Shadow AI" – the unauthorized use of AI tools and services within organizations without proper security oversight. As employees increasingly adopt AI-powered applications for productivity, security teams often lack visibility into how data is being shared and processed across these platforms.

Reco's AI agents are designed to provide this visibility by mapping relationships between users, applications, and data across the SaaS ecosystem. The platform can identify when sensitive information is being shared with unapproved AI services or when unusual patterns suggest potential security incidents.

Competitive Landscape

The funding round positions Reco in a competitive market that includes established players like Splunk and newer entrants focused on cloud security. However, Reco's specialization in SaaS environments and its AI-driven approach to threat detection sets it apart from traditional security information and event management (SIEM) solutions.

Industry analysts note that the shift toward SaaS-centric security tools reflects a broader trend in enterprise security, where organizations are moving away from perimeter-based defenses toward more granular, application-level protection.

Use of Funds

The $30 million Series B will be used to expand Reco's platform capabilities, grow its engineering and sales teams, and increase market reach. The company plans to enhance its AI models to better understand complex SaaS workflows and improve detection accuracy for sophisticated threats.

Zeev Ventures' lead investment signals confidence in Reco's approach to addressing the evolving security challenges of modern enterprise environments. The firm has a track record of backing successful cybersecurity companies and sees Reco as well-positioned to capitalize on the growing demand for SaaS security solutions.

Regulatory Drivers

Increasing regulatory requirements around data protection and privacy are also driving demand for solutions like Reco's. Regulations such as GDPR, CCPA, and industry-specific compliance frameworks require organizations to maintain strict control over how data is accessed and shared across applications.

Reco's platform helps organizations demonstrate compliance by providing detailed audit trails and real-time monitoring of SaaS activities. This capability is particularly valuable for highly regulated industries such as finance, healthcare, and government.

Technical Approach

The company's technical approach involves deploying lightweight agents that integrate with SaaS applications through APIs, allowing for continuous monitoring without disrupting user workflows. The AI models are trained on patterns of normal behavior across different SaaS platforms, enabling them to identify deviations that may indicate security threats.

This approach contrasts with traditional security tools that often generate high volumes of false positives or require extensive manual configuration. Reco's AI-driven system aims to reduce alert fatigue while improving detection accuracy.

Market Timing

The funding comes amid heightened awareness of SaaS security risks following several high-profile data breaches involving cloud-based applications. Organizations are increasingly recognizing that securing SaaS environments requires specialized tools and expertise beyond traditional network security measures.

Reco's growth trajectory suggests that enterprises are actively seeking solutions that can provide comprehensive visibility and control over their SaaS ecosystems. The company's ability to attract significant funding despite challenging market conditions for cybersecurity startups indicates strong investor confidence in its approach.

The Series B funding positions Reco to expand its market presence and continue developing its AI-powered security platform as organizations worldwide grapple with the security implications of widespread SaaS adoption and the emergence of Shadow AI within their environments.