Cleo Capital Thesis: Cybersecurity
Cleo Capital is a thesis-driven fund and in addition to our previous focus areas, we are newly focused on 3 key areas: Blue-Collar Work Enablement, Cross-Border FinTech, and Cybersecurity. We invest from pre-seed to series B. No one is too early for us to fund.
This article is part of a series explaining our thesis areas and the specific markets we are interested in.
We seek to make the internet safer for everyone.
It’s likely your life has been impacted by a cybersecurity issue in some way: Perhaps your website or email has had a hacking attempt; perhaps a company you interact with has had a cybersecurity breach that includes your data; or perhaps someone has stolen your social media credentials and tried to sell them back to you. Who’s to blame? 88% of all cybersecurity incidents are caused by human factors: someone clicks a link they shouldn’t or unsuspectingly provides confidential information to a nefarious party. It’s time to resolve the cybersecurity issues that affect everyday people to make the internet a safer place.
No one is safe until everyone is safe
Cybersecurity issues are transforming the way people use the internet — but not quickly enough. There are three major areas for concern:
Consumer cybersecurity
There is no shortage of cybersecurity scams affecting consumers: phishing, investment fraud/pig butchering, extortion, romance scams, credit card fraud, sextortion, and more.
However, consumers aren’t quite sure what steps to take to keep their digital presence secure. 44% of people on the internet report recycling passwords across personal and business-related accounts, while 62% of people have shared an internet password over email or text. Even after a cybersecurity incident occurs, people are unsure of what to do, as 56% of Americans report they don’t know what steps to take after being the victim of a data breach.
This not only confirms that the majority of cybersecurity incidents are human-related, but also sheds light onto the trust and safety tools consumers desperately need. Anyone with a public presence on the internet has to worry about their digital and in-person security. In addition, fraud is another overarching issue that affects most people on the internet.
Cybercriminals use many vectors, such as social media, forums, email, websites, and more to get their hands on consumer data. An example of an enterprise solution that protects users on social media is Block Party, which safeguards first-party data to protect against potential threats. How else can turn-key solutions protect consumers online?
Could the internet be made safer if authentication tools verify the identity of everyone you come in contact with? How about if verification tools can confirm that a company or website is actually what it says it is? While consumer education on internet best practices certainly plays a part, what consumers desperately need are tools that help them see through the murky water of the internet to identify who and what they are interacting with.
Cybersecurity infrastructure
Development tools and API-driven tools have the potential to strengthen cybersecurity infrastructure for consumers. Consider tools like Plaid, which provide a secure way to connect your bank to apps you use. This type of solution adds an extra layer of security, mitigating or preventing your financial information from getting into the wrong hands when you’re buying things online or even buying a home in person.
Another example is Vanta, a trust management solution which automates security and compliance. Could this technology make it easier for consumers to log into their apps and solutions without having to prove they’re not a robot every single time?
Consider how strengthening the infrastructure of solutions consumers use on a day-to-day basis could make it easier to verify both information and people, cutting down on spam and hacking.
Cybersecurity for defense
For some nation states facing sanctions, conducting cybercrime is a growing and troubling way to support the economy. For example, this country is one of the leading sources of phishing attacks across the globe, while roughly 50% of one country’s ’s foreign currency earnings come from cyber theft. Not only can solutions that crack down on international cybercrime strengthen national security, they can also improve security for regular consumers.
Disinformation attacks, which pose some of the biggest cybersecurity risks, target everyday people on the internet, causing digital and in-person chaos. While many disinformation scams are designed to make money, others cause political disruption which can have overarching ramifications internationally.
The future of war will happen on the internet, and countries require stronger online defenses to protect against nefarious bad actors in rival nations in order to keep people safe.
We seek to strengthen cyber security on multiple levels
There were roughly 343,338,964 victims of cyberattacks in 2023, and data breaches rose by 72%, surpassing the previous record, between 2021 and 2023. We believe that while the enterprise market is well-served by cybersecurity solutions, the consumer, infrastructure, and defense markets for cybersecurity are ripe for opportunities.
Consumer, infrastructure, and defense cybersecurity markets can be supported by overlapping solutions that solve problems across categories. For example, a tool that strengthens national cybersecurity will undoubtedly improve the internet experience for civilian consumers, while a development tool that protects financial information on an e-commerce app will keep international scammers away from consumers.
In other categories where we invest, such as blue-collar work enablement and cross-border fintech, our experience is directly in line with companies that create those solutions. Our experience in cybersecurity comes from the vectors. Having invested in and worked closely with fintech, crypto, dating apps, and other such solutions, we have seen that cybersecurity for the consumer, infrastructure, and defense markets is limited, with plenty of room for improvement.
Cleo Capital: Request for startups
Our search for cybersecurity solutions is wide. While we’re specifically not looking for solutions for enterprise as we feel that’s a well served area, we are interested in anything that impacts consumers, dev tools/infrastructure, and defense as related to cybersecurity.
We’re interested in talking to founders that explore the following topics and beyond. Keep in mind that these categories are not set in stone. If you strengthen cybersecurity in a different way that doesn’t fall neatly into one of these buckets, we still want to hear from you.
Trust and safety tools: How can we verify and authenticate people on the internet in a way that is user-friendly and seamless? Is it possible to automate this process to streamline internet use so people don’t have to go through an authentication process every time?
Fraud protection: Financial, identity, digital — there are many types of fraud. What can we do to strengthen cybersecurity for consumers to minimize this type of cybercrime — both on an individual and infrastructure level?
Ransomware protection: While enterprises deal with their fair share of ransomware, it’s becoming increasingly common for small businesses and consumers. What do we need to put in place to protect them?
Cybersecurity insurance: It is now financially worthwhile for individuals with a large digital presence, such as influencers and journalists, to protect themselves with cybersecurity insurance. What options exist?
Consumer education and training: As the majority of cyberattacks are related to human error, there is a desperate need to educate consumers on the best practices of using the internet and keeping safe. How can we provide knowledge that sticks?
Password protection: Keeping your password safe is low-hanging fruit, but it’s often the first line of defense for consumer protection. What solutions exist to keep consumer passwords secure?
Development and API tools: How can we help consumers connect their financial information to apps they use in an easy and streamlined way? Turn-key solutions need to be user-friendly and intuitive.
First-person data protection: People’s identities are freely available online, especially for those who make their living using tools on the internet. How can we strengthen security to keep this data in the right hands?
National security: How can we keep foreign nations from committing disinformation, phishing, ransomware, and fraud scams on consumers? What are some ways to minimize the threat vectors coming from outside the country?
Other: Cybersecurity for consumers, infrastructure, and defense comes in many forms. Tell us what you think it can look like.
Join us in strengthening cybersecurity for everyone. Get in touch at cleocap.com.