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Good morning! It's Friday, November 10th. Today’s post looks at Abnormal Security, a cybersecurity firm utilizing AI that recently crossed the $100M ARR milestone!

THE FEATURE

The $4B Cybersecurity Company Using AI to Fight Scammers

In recent years, phishing emails have become far more complex and believable as scammers have adopted AI tools like ChatGPT to deceive their victims, resulting in over $43B in corporate losses since 2016. 

Traditional cyber security alert signatures have proven incapable of detecting these scams, but one company has a solution. 

Abnormal Security is fighting fire with fire by using its advanced machine learning system that can easily detect AI scammers. Last year, Abnormal Security raised $210M at a valuation of $4B!

So, What’s the Business?

Evan Reiser and Sanjay Jeyakumar founded Abnormal Security in 2018 despite neither of the two coming from cybersecurity backgrounds. 

The two had initially met working at TellApart, an advertising tech startup that was sold to Twitter for $479M in 2016. After two years working at Twitter, the pair quit to create Abnormal Security. 

Evan and Sanjay gambled that their marketing experience at TellApart and Twitter could be used to revolutionize the world of cyber security. 

At the two companies, they both worked extensively in behavioral profiling, the process by which social media companies can display ads tailored to specific user profiles. They believed they could tweak existing behavioral profiling tech to create software that swiftly identifies socially engineered email attacks. 

As it turns out, Even and Sanjay were completely right. Just a few months ago, Abnormal Security crossed the $100M ARR milestone, with 10% of Fortune 500 companies now using Abnormal’s AI cybersecurity software to protect their businesses. 

Businesses that use Abnormal Security download it onto all company-affiliated devices. With the software installed, Abnormal’s machine learning system gets to work and analyzes all company communications. In doing so, it familiarizes itself with how employees talk to each other, what topics they discuss, when they talk, and more. In doing so, it can quickly alert businesses when a potentially malicious email is delivered.

Deploying Abnormal’s security software is extremely easy for its clients since it can be seamlessly integrated with Google Workplace and Office 365. In fact, Microsoft has even partnered with Abnormal and sells its subscription service directly through its Azure Marketplace. 

Abnormal Security markets itself as the company of the future that can address modern cybersecurity problems in ways that established, billion-dollar security firms like Proofpoint and Mimecast cannot. Their claim seems to be valid since Abnormal Security has a 98% customer retention rate.

Key Observation

Since the launch of ChatGPT in November of last year, venture capitalists have been eager to get in on any startup that shows a viable new use of artificial intelligence. 

Less considered are the companies developing software and machine learning tools that can protect businesses and individuals from AI. 

The AI revolution is expected to impact almost every industry, meaning there are endless opportunities for entrepreneurs to find their own angle and niche in the industry. 

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