Consumer-Focused Privacy Startup Cloaked Raises $375M as Enterprise Expands

Consumer-oriented security tools often focus on one type of modality, such as password protection, VPN, or identity management. This forces people to use multiple tools to keep their data private. OvercastThe company, which instead offers a suite of security and privacy solutions, announced Thursday that it has secured $375 million in Series B funding and growth financing to expand its consumer offering and enter the enterprise market.

The company was founded by brothers Arjun and Abhijay Bhatnagar in 2020 and initially offered users the ability to create multiple identities with data such as emails, phone numbers and passwords Log in to different services without providing your real data. Over the years, Cloaked implemented other services such as data deletion, identity theft insurance, VPN, and dark web monitoring. Last year, introduced AI-powered call screening.

Now, Cloaked sees an opportunity to protect consumers in a world where hackers or scammers can use AI to obtain data or money in new ways.

“We have seen AI become better than humans at compromising people. And we see this as an issue of personal safety, family safety and financial fraud. We also see (the proliferation of AI) around spam and phishing. And it all comes down to now, in this era of surveillance, how to find a solution that fits between these different aspects, and we are winning in this category from the consumer side,” said the company’s CEO Arjun Bhatnagar.

The startup intends to expand its AI-based detection protection to texting, email, and browsing this year. It is also testing an artificial intelligence agent that could take actions on your behalf, such as changing the password for a service whose data has been compromised. Bhatnagar said the plan is to use AI securely and not transmit sensitive information to the cloud.

The company tells TechCrunch that it experienced 10x growth last year and now has more than 350,000 paying customers. It has also protected 10 million identities and helped users clean more than 1 billion records from data broker sites. Bhatnagar noted that since launching its call screening feature last year, the app has processed more than 50 million fraudulent or unwanted phone calls.

Cloaked is now also rolling out to the enterprise, offering employees the same protection as in its consumer products, including identity and password management. This product provides employees with alerts about potential scams. Additionally, company CISOs can observe people’s risk level and verify aggregated data from cleared records or stopped scams. And they can see possible scams or data that can affect the company’s business.

The startup has almost 70 employees and aims to expand the team in different areas such as product, engineering, enterprise sales and international expansion.

Cloaked competes against companies like 1Password, GaurdioFirefox, Proton and Mozilla. The company even has some overlapping products with one of its investors, DuckDuckGo, offering VPN and identity theft protection.

The latest round was led by General Catalyst and Liberty City Ventures, with participation 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 funding through its Customer Value Fund, which lends money to startups without diluting capital to drive customer acquisition. The startup did not disclose the valuation or the split between equity and growth financing.

Prior to this, Cloaked had raised more than $29 million in investor financingincluding Lux Capital, Human Capital and General Catalyst.

Mark Crane, a partner at General Catalyst, said the firm has invested in the startup in every round, but led a round for the first time. He said Cloaked’s suite of security and privacy offerings cater to a wide range of consumers.

Crane believes Cloaked has the right product to protect people and businesses in the new AI-driven Internet and become a good “seal of approval” for users in a world where there are many AI agents.

“In terms of the product, they’ve built tons of surface area for the consumer and what they want to be able to use for their privacy,” he told TechCrunch during a call. “Some people want to use everything that comes out of the box, and some people want to use smaller pieces. And the beauty of Cloaked is that any consumer, whatever they’re interested in, can approach it and get the solution they want and need.”