Privacy-centric firm Cloaked secures $375M in funding to broaden its reach to enterprise clients

Consumer-focused security solutions typically address specific areas such as password management, VPN services, or identity protection. This approach often necessitates the use of multiple platforms for comprehensive data privacy. Cloaked, a firm that offers a comprehensive suite of security and privacy tools, announced on Thursday that it has successfully raised $375 million in Series B funding along with additional growth financing aimed at enhancing its consumer offerings and venturing into the enterprise sector.

Founded by siblings Arjun and Abhijay Bhatnagar in 2020, Cloaked initially provided users the capability to create multiple identities with distinct data—emails, phone numbers, and passwords—enabling them to access various services without revealing their real information. Over time, the company has expanded its services to include data removal, identity theft insurance, a VPN, and dark web monitoring. Last year, it also launched AI-driven call screening technology.

Cloaked is now positioning itself to safeguard consumers in a landscape where hackers and scammers increasingly employ AI to extract data or financial resources in innovative ways.

According to CEO Arjun Bhatnagar, “We’ve observed AI surpassing humans in compromising individuals. This poses a significant issue regarding personal and family safety as well as financial fraud. Additionally, with the rise of AI-driven scam spam and phishing, it’s essential to devise a solution that addresses these varied concerns. We believe we are leading the way in this area on the consumer front.”

The startup has plans to broaden its AI-based screening features to encompass text messaging, email, and web browsing in the current year. Moreover, it is piloting an AI agent capable of taking proactive measures such as changing passwords for compromised accounts. Bhatnagar emphasized the importance of utilizing AI responsibly, ensuring that sensitive data is not transmitted to the cloud.

Cloaked reported a tenfold increase in growth last year, boasting over 350,000 paying subscribers. The firm has safeguarded 10 million identities and aided users in eliminating over one billion records from data brokerage websites. Since launching its call screening feature, the app has managed over 50 million spam and scam phone calls.

In addition to its consumer offerings, Cloaked is now extending its services to the enterprise sector, providing employees with similar protections, including identity and password management, and alerting staff about potential scam risks. Company Chief Information Security Officers (CISOs) will be able to assess individual risk levels and review aggregated data regarding cleaned records and detected scams, as well as potential threats that may affect the business.

With a current workforce of nearly 70 employees, the startup is looking to grow its team across various sectors including product development, engineering, enterprise sales, and international outreach.

Cloaked faces competition from numerous players in the market, such as 1Password, Gaurdio, Firefox, and Proton, with some overlap in offerings with DuckDuckGo, one of its investors.

This recent funding round was spearheaded by General Catalyst and Liberty City Ventures, with contributions from Lux Capital, Human Capital, Marquee Ventures, Fifth Growth Fund, NFL Players Association, LG Technology Ventures, Assurant Ventures, and DuckDuckGo. General Catalyst also provided growth financing through its Customer Value Fund, which funds startups without equity dilution to assist in customer acquisition. Details regarding the valuation and the split between equity and growth funding were not disclosed.

Prior to this funding round, Cloaked had raised over $29 million from various investors, including Lux Capital and General Catalyst.

Mark Crane, a partner at General Catalyst, shared that the firm has supported Cloaked throughout its fundraising journey but took the lead for the first time in this round. He expressed confidence in Cloaked’s diverse portfolio of security and privacy solutions, noting its appeal to a broad spectrum of consumers.

Crane believes that Cloaked is well-positioned to protect both individuals and organizations in the evolving landscape of AI-driven internet usage, potentially serving as a trusted “housekeeping seal of approval” for users facing myriad AI agents.

“In terms of the product, they have created a vast array of options for consumers seeking privacy solutions,” he remarked during a call. “Some users want a comprehensive package, while others prefer to select specific features. The strength of Cloaked lies in its ability to cater to a diverse range of consumer needs.