Cybersecurity software startup Arnica received $7 million in seed funding after being in stealth mode for 14 months, CEO and co-founder Nir Valtman said.
Atlanta Inno first reported Arnica received an investment from Joule Ventures, a venture capital firm based in Atlanta and Tel Aviv, Israel, in December. Joule Ventures, which has a $65 million fund, and First Rays Venture Partners led the seed round. Other investments came from Avi Shua, co-founder and CEO of Orca Security, Dror Davidoff, co-founder and CEO of Aqua Security, and Baruch Sadogursky, head of developer relations of JFrog.
The raise brings the company’s total funding to nearly $8 million and marks Arnica's entrance into the market.
The investment comes as venture funding into startups has hit a near 30% decline from last year. Company valuations have been reset from their highs in 2021, making it more difficult to seek capital. Economic uncertainty has made investors more cautious.
Founded in August 2021, Arnica produces machine learning software for companies to detect hackers pretending to be developers by validating their developers’ activities and changes they make to code.
Demand for the company stems from a rise in attacks on software development, which increased by 650% in 2021, according to supply chain management platform Sonatype. That rise comes as more developers download software such as Java, JavaScript and Python. Those attacks make up one-fifth of data breaches with an average cost globally of over $4 million, according to IBM.
The global cybersecurity market is projected to grow from $156 billion this year to $376 billion by 2029, according to market research firm Fortune Business Insights.
Arnica has 15 full-time employees, eight of whom are based in Atlanta. It has a 600-square-foot office in Alpharetta.
While vice president of data security at financial technology company Finastra, Valtman found two reasons for supply chain attacks: inadequate access management to software used by developers and lack of context around anomalies found in code.
That led him to start Arnica along with Moshe Dahan, former director of customer office strategy at Zebra Technologies Corp., and Eran Medan, former senior software development manager at Amazon Web Services Inc.
