Hypr Secures $30M to Expand Identity Protection Platform – Source: www.databreachtoday.com

Identity & Access Management
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Multi-factor & Risk-based Authentication
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Security Operations

Silver Lake Waterman Investment in Hypr Fuels Product Development, Market Expansion

Michael Novinson (MichaelNovinson) •
June 7, 2024    

A decade-old identity assurance vendor raised $30 million from Silver Lake Waterman to support its expansion from passwordless authentication into identity risk and identity verification.

See Also: OnDemand | Hacking Your Digital Identity: How Cybercriminals Can and Will Get Around Your Authentication Methods

Hypr co-founder and CEO Bojan Simic said the investment will help the New York-based vendor address additional gaps in the identity security market, especially in light of modern AI tools that are increasingly used for social engineering and credential hacks. The money will fuel Hypr’s expansion into more sectors in North America and Europe as well as potential acquisitions to complement its product offerings.

“We decided to take on some capital; it gives us much more flexibility in terms of growing the business, going after more customers, building greater products, all that good stuff,” Simic told Information Security Media Group.

Hypr, founded in 2014, employs 121 people and has raised $122.1 million in five rounds of outside funding, according to IT-Harvest. Simic, who has been Hypr’s CEO since May 2021, said the company’s decision to partner from Silver Lake Waterman was influenced by the firm’s strong connections on the West Coast and its impressive track record of supporting companies through to an initial public offering (see: Hypr CEO Bojan Simic on Bringing Passwordless to Edge Cases).

“We definitely ideally would like to take the company public,” Simic said. “This is my first company and that would be a nice medal for sure. I think it would be a great outcome for employees and our investors.”

From 1 Product to 3 Products

Simic said he’d like to take Hypr public within the next three to five years and is preparing for the public markets by aligning with the right partners and making strategic moves. Hypr will use the $30 million to ensure its three products feel consistent and unified from the perspective of an end user, which he said requires significant internal collaboration and orchestration to ensure the products work together well.

“We’ve had to shift the way that we operate our engineering teams to make sure that we don’t look like we’re building in three separate silos and that we’re all rowing in the same direction,” Simic said.

The new product capability allows the company to address more comprehensive identity security needs, particularly around stopping hackers from turning to social engineering as the shift to passwordless authentication has eliminated password-based threats. Traditional knowledge-based security measures aren’t effective against adversarial AI, meaning deterministic methods are needed to verify identities.

“AI is really good at figuring out solutions around probabilistic methods of doing something,” Simic said. “What AI is really bad at is finding ways around deterministic sets of security controls. Deterministic sets of security controls are cryptographic or math-based in nature, and they’re very much binary. They’re extremely difficult to work around because they’re based in proofs; they’re based in logic.”

Expanding Into New Verticals, Geographies

Hypr plans to expand into new markets in North America and Western Europe, as well as into industries where legacy systems prevail, such as retail, oil and gas, and critical infrastructure, Simic said. The company wants to increase its business outside North America from 10% today to 30% within three years, focusing on Western Europe, Japan and Singapore due to the need to prevent AI-driven financial services fraud.

“It’s about: ‘How can we deliver these capabilities to those regions and the types of customers that are likely to face the most fraud as a result of hackers being much more efficient now that they have modern AI tools available to them?'” Simic said.

The company will measure the success of the $30 million investment by tracking customer acquisition, product deployment speed, resiliency and customer retention, according to Simic. He emphasized the importance of the product’s reliability given its critical role in customers’ operations. Hypr will focus on its current products for the next six months, but it remains open to acquiring complementary products.

“The Achilles heel of any cybersecurity company is becoming shelf-ware,” Simic said. “And we work very hard to make sure that our customers are utilizing every aspect of our product that they’re purchasing as quickly as humanly possible.”