Cleo Capital, the early-stage venture fund that counts the AI firm Groq, fintech company Ellevest, and fashion brand Hill House as investments, has announced the launch of a new cybersecurity accelerator.
The program is looking for pre-seed and seed companies from all around the world. The accelerator is a remote, 12-week program, with a standard investment of $250,000 for 7% equity. Up to ten companies will be selected for the program, according to the venture fund.
Sarah Kunst, the founder and managing partner of Cleo Capital, said she was inspired to launch the accelerator after seeing how much fraud was happening in crypto and fintech, which she invests in, and with dating apps like Bumble, where Kunst serves as an advisor.
Kunst told TechCrunch that after hearing stories from her father and nonagenarian grandmother experiencing cyber threats and fraud hitting smaller towns in America where they live, “you know it’s out of control,” she said.
Cybersecurity threats are becoming increasingly costly, especially as AI becomes more sophisticated: In 2023, the FBI found that Americans lost more than $12.5 billio to cybercrime, which includes romance fraudsters and fake legal fees. That’s more than double the increase from the combined $11 billion stolen from Americans over 2020 and 2021, according to the agency’s most recent data.
But where there are cybersecurity problems, there is also ample space for innovation. Venture funding has flooded the cybersecurity sector in recent years, with demand on the rebound from a sluggish 2023. Several established cybersecurity companies got minted and reached “unicorn” status this year, including Chainguard, Huntress, and Bugcrowd, as TechCrunch previously reported.
“Cybersecurity investors told me it was a space where only enterprise startups could thrive, but I reject that idea,” Kunst said. “Ninety percent of Americans are confronted with cybersecurity issues, most in their consumer lives or on their consumer devices. This is a massive opportunity that’s far too important to pass up.”
Right now, Kunst is looking for companies from consumer, the defense sector, and dev tools and infrastructure. A pressing issue for Kunst is that it’s too easy for scammers to target their victims. “You can pretend to be anyone on social media or a dating app,” she said.
That’s why she wants to address the “crushing burden” of the internet becoming “unusable” in the face of online cybersecurity threats. Kunst talks about seeing more online authentication to prove who people are, or tools that alert users to potential scams, apps that can help protect against government-backed cyberattacks or any tool that a startup can use to ensure their product is safer. All the while, companies should consider the effect on user privacy of the products that they’re building.
The deadline to apply to the accelerator is January 20, with a February 24th start date.
“This is a small start of a giant industry,” she said. “We need and deserve an internet that has some amount of trust and security. Cleo is funding that shift.”