Reco Raises $25M to Revolutionize SaaS Security with AI-Driven Solutions

Reco Secures $25M Funding for AI-Driven SaaS Security

Recolabs Inc., operating as Reco, a cloud security startup specializing in securing software-as-a-service (SaaS) applications, has successfully closed a $25 million funding round. The investment, led by Insight Partners and including participation from Zeev Ventures, boldstart ventures, Angular Ventures, and Redseed, brings Reco's total funding to $55 million 1

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Addressing the SaaS Security Gap

Reco's platform tackles the growing challenge of SaaS security in enterprise environments. With organizations running an average of 1,061 SaaS applications – a 26% increase over the past two years – and 80% of employees admitting to using unauthorized SaaS and AI apps, the risk of data breaches has significantly increased 2

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. The average cost of a data breach reached $4.88 million in 2024, highlighting the critical need for robust SaaS security solutions 2

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AI-Driven Security Solutions

Reco's AI-native platform offers several key features:

1. Automatic discovery and mapping of SaaS applications, including shadow IT 1

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2. AI-powered scanning for cybersecurity issues, including over-privileged accounts and unused login credentials 1

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3. Detection of AI data leaks in SaaS applications with generative AI features 1

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4. Identification of unusual data access patterns suggesting compromised accounts 1

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5. Compliance checking against regulations like GDPR 1

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Rapid Growth and Market Adoption

The company has experienced significant growth, with a fivefold increase in annual recurring revenue and a threefold rise in customer numbers over the past year. Reco's Net Promoter Score (NPS) of 82 across its customer base demonstrates strong market adoption 2

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Expanding Capabilities and Team

With the new funding, Reco plans to:

1. Scale its AI-native SaaS security platform 2

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2. Accelerate channel partnerships 2

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3. Expand its SaaS App Factory™, which currently secures over 175 applications 2

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4. Introduce Reco AI Agents for alerts and identities, aiming to streamline security operations 2

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The company has also appointed Bob Horn as its new Chief Revenue Officer to lead global sales strategy 2

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Industry Perspective

Mihau Faur, CIO of UiPath, praised Reco's technology, stating, "Reco transforms SaaS security from a constant struggle to a strategic advantage," highlighting the platform's ability to reduce workload while providing better visibility and protection 2

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Praveen Akkiraju, Managing Director at Insight Partners, emphasized Reco's potential to lead the rapidly expanding Dynamic SaaS Security market, citing the company's innovative approach and deep customer trust 2

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As SaaS environments become increasingly complex with the adoption of AI apps and agents, Reco's AI-native approach to dynamic SaaS security positions the company at the forefront of addressing critical challenges in enterprise cybersecurity.