AI-Focused Cybersecurity Startup Neo Raises $100 Million

“Cybersecurity startup Neo launched on Monday with $100 million in funding, as investors pour cash into artificial-intelligence startups led by cybersecurity veterans.

 

Boston-based Neo, founded by former SentinelOne leaders Nick Warner and Shlomi Salem and tech veteran Eran Shirazi, raised the combined seed and Series A funding from Andreessen Horowitz, Bessemer Venture Partners, Craft Ventures and Merlin Ventures.

 

Neo's premise, Warner said, is that traditional enterprise security tools won't keep pace with software that can now reason, make decisions and act independently. "Enterprise security was built for a world where software behaved predictably," Warner said. "That world is changing fast."

 

New frontier AI models have sparked worries about their ability to automate cyberattacks or identify software vulnerabilities.

 

Warner argues the risk is from more mundane sources: ordinary business applications built before AI that suddenly gain agentic abilities. That creates new risks related to data access and user permissions.

 

Research firm Gartner predicts AI agents will be built into 40% of enterprise software applications by the end of 2026, up from less than 5% in 2025.

 

Companies must understand what those applications can access, which AI models sit behind them and how they interact with corporate data, Warner said.

 

The startup's software aims to give security teams visibility into those systems, allowing them to inventory AI-enabled applications, review their capabilities and apply controls. The company has tested the technology with organizations across the financial services, transportation and energy sectors.

 

Neo belongs to a fast-growing cohort of AI-focused startups led by experienced cyber executives. In March, Mandiant founder Kevin Mandia raised $189.9 million in backing for his new startup, AI security company Armadin. In December, former Cybereason chief Lior Div raised a $130 million Series A for security-operations-focused 7AI, while Cyderes co-founder Eric Foster secured a $250 million Series B for his platform, Tenex, in May.

 

Zane Lackey, a general partner at Andreessen Horowitz who led its investment in Neo, said experienced founders understand the shortcomings of existing security products and the problems enterprise security buyers are trying to solve. Bankers and advisers say they are seeing the same trend in early stage investing, with established figures attracting large sums while newer companies struggle to secure significant funding.

 

"The trust is there because they have the record," said Eric McAlpine, founder and CEO of investment bank Momentum Cyber.

 

Warner served as SentinelOne's chief operating officer before becoming president after the company's 2021 initial public offering. Salem led the company's detection engineering and threat research teams. Neo's senior staff also includes former executives and engineers from companies such as Wiz and Palo Alto Networks, as well as alumni of Unit 8200, the Israel Defense Forces' elite cyber and intelligence unit.

 

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James Rundle writes for WSJ Pro Cybersecurity.” [1]

 

1. AI-Focused Cybersecurity Startup Neo Raises $100 Million. Rundle, James.  Wall Street Journal, Eastern edition; New York, N.Y.. 21 July 2026: B4.