Cybersecurity Startup Inspectiv Closes In On $8.6 Million Funding, Expands C-Suite
Two seasoned security professionals are coming together to lead cybersecurity startup Inspectiv into its next chapter. One is Ryan Disraeli, Forbes 30 Under 30 alum and founder of two-factor authentication platform TeleSign, who came on board as Inspectiv CEO in June. The other is Joseph Melika, who served as head of security engineering at Verizon before founding Inspectiv in 2018.
Inspectiv — which combines crowdsourced vulnerability detection with automated vulnerability scanning — announced $8.6 million in Series A funding on Thursday, bringing its total funding to more than $16 million. StepStone Group led the round, along with Fika Ventures, Freestyle and Mucker Capital. The new funding comes with approximately 80% of the money from Inspectiv’s previous round remaining unspent, according to TX Zhuo, general partner at Fika Ventures.
“Imagine that you just hired 4,000 people to work for you tomorrow, and their job is to continue to find security vulnerabilities in your system,” says Melika, Inspectiv’s founder and executive chairman. “And as they find vulnerabilities, we work with that community on your behalf … so now your focus becomes on fixing the issues instead.”
Inspectiv combines automated scanning systems powered by artificial intelligence with a large network of freelance security researchers — recruited out of the expansive network Melika created during his decades leading security teams at Viacom and Verizon. The combination forms a platform that aims to help companies identify, fix and protect against security threats in an efficient way.
Program managers at Inspectiv act as middlemen between each customer and the team of freelance security researchers. Then, when the researchers detect vulnerabilities in one customer’s system, the automation part of Inspectiv kicks in. It uses AI to identify the pattern that caused the vulnerability and looks for similar vulnerabilities in Inspectiv’s other customers. Thus, customers benefit from large groups of researchers even if each researcher isn’t working directly with that specific customer.
At the end of the process, Inspectiv alerts customers to newly detected security vulnerabilities and how to fix them. The goal is to add onto customers’ existing security teams that often have too much to do, explains Disraeli.
“Security’s a competitive market,” Disraeli says. “There are lots of companies out there that have communities of researchers, and also companies that have scanning technology, but what we’re building is disruptive in that our platform has both.”
Melika founded Inspectiv in 2018 to address that specific gap in the vulnerability detection space, and has led the company up until its recent C-suite expansion.
“The reality is that I was having all the fun by myself on the leadership team until this year, and I felt it was just too much fun for one person to have,” Melika quips.
He and Disraeli are neighbors who became friends over cups of coffee and dog walking, bonding as two people who felt they were on the same life journey. So when Melika decided to expand his team this year, he thought of Disraeli, who founded TeleSign and grew it until it was sold in 2017 for $230 million.
“We thought this was a perfect match of someone who has operational chops and the gravitas within the industry, combined with [Melika], who has a great product vision and the domain expertise of being a practitioner in his space,” Zhuo says. He has served on Inspectiv’s board since its seed round in 2020 and plans to stay on “until they don’t need me anymore.”
Along with the latest funding round, Inspectiv is expanding its leadership team with the addition of Disraeli as CEO, as well as Karen Nguyen as CRO, Ray Espinoza as CISO and Ross Hendrickson as VP of Engineering. Additionally, Inspectiv now has 22 employees, doubling its headcount from the end of last year.
Inspectiv’s valuation has tripled since its $6 million seed round in 2020, according to Disraeli, which means that this time around, Inspectiv is giving up less equity for more funding. Disraeli explains that the majority of Inspectiv’s money has remained in its “war chest” because the company has been capital efficient and is now “gearing up for investment and growth.”
Customer growth, customer retention, Inspectiv’s automation feature and the company’s new leadership team accounts for the 3x increase in valuation, according to Disraeli. He says Inspectiv projects it will also double revenue in 2022 — the company prices like a subscription service based on the number of products it monitors for a customer.
“We hit profitability at some point, not too long ago,” Melika adds.
Moving forward, Melika and Disraeli hope to continue focusing on the AI-driven side of Inspectiv while continuing to hire on product, engineering and go-to-market teams. Zhuo emphasizes that even amid a market downturn, security vulnerabilities are something companies have to face and thus see as a must-have. Gartner estimated that by 2026, at least half of C-level executives will have performance requirements related to cybersecurity risk built into their contracts.
“Have you ever felt like your entire life has been leading up to one moment?” Melika said. “This is it for me. Working in startups has always been something I really enjoyed, and working in security has been something that I absolutely loved, and now I get to do it with a lot of people I enjoy working with.”