Data breaches and leaks have become a significant concern for organizations globally, with the average cost of data breaches now reaching $4.5 million, a 12% increase from 2020. With a rising number of incidents, businesses face pressure to protect their sensitive information and data. Traditional cybersecurity measures often fall short, leaving companies exposed to both external attacks and internal breaches. These measures are also not equipped to handle the new microservice architectures that applications are continuing to adopt. LeakSignal, Blu Ventures’ recent portfolio investment, aims to solve these critical challenges with an innovative solution.
About LeakSignal
LeakSignal has developed software that provides data visibility and posture management platform for microservices.
The platform allows security teams to monitor data flows, assess risk severity, and apply policies for sensitive data in microservice environments, strengthening overall data security management.
LeakSignal utilizes agentless, inline traffic analysis and advanced data classification at layers 4-7, offering unparalleled security for microservices.
The founding team is actively involved in shaping cyber policy and regulations related to microservices, giving the business a competitive edge.
Inside Look at Blu’s 5 Ts for LeakSignal
We spoke with deal lead and Blu Ventures Partner Bill Phelps to gain more insight on Blu’s rationale in their recent investment. The Blu investment criteria can be broken down into Blu's proven 5 Ts framework: Team, Total Addressable Market (TAM), Technology, Traction, and Terms.
Team:
LeakSignal’s team is led by an experienced duo of Co-Founders: CEO Welsey Hales and Chairperson Issac Roth. The team has spent many years in the cybersecurity startup ecosystem and previously worked together, demonstrating a strong collaborative synergy and industry expertise. Deal lead Bill Phelps states that Wesley has a “wealth of experience,” founding multiple exited startups, one of which had been acquired by Google. Wesley was also a Director at Shape Security, a company that provided services similar to LeakSignal's, allowing him to apply his relevant experience to LeakSignal.
Issac is a serial entrepreneur who has deep experience in technology and the cloud. He was the CEO and Co-Founder of Makara, which was quickly acquired by Red Hat. Isaac also created and led Red Hat OpenShift, a leading enterprise cloud platform, working closely with the current Red Hat CEO. Issac and Wesley’s strong expertise in both technology and entrepreneurship created a robust duo that impressed Blu. Their experiences heavily supported what LeakSignal aims to do.
The duo is also involved with the PCI standards body, assisting in writing and providing guidance on cyber policy and microservice regulations. These regulations, combined with their patented technology, can help boost LeakSignal’s growth and adoption, giving it a competitive edge.
Total Addressable Market (TAM)
LeakSignal falls under the Application Security Market, which has a large TAM of $7.6b as of 2023. They are mainly targeting US enterprise companies that are experiencing data leakage and scraping. Due to the expanding adoption of cloud technology, mobile applications, and the growing interconnectedness of digital ecosystems, the demand for application security solutions is expected to rise, with a projected $20.6b market size by 2028. Additionally, these enterprises are continuously adopting the microservice architecture that LeakSignal is designed to protect. Bill Phelps states that “microservices are the future of web-based applications,” as both new web applications as well as legacy applications are integrating this framework into their software. Not only does this increase the addressable customer base, but it also creates opportunities for large enterprises to acquire LeakSignal in the future.
Technology
LeakSignal aims to enhance security for microservices by providing continuous visibility into data leakage and risk exposure. The platform is agentless and provides inline traffic analysis and advanced data classification at layers 4-7. It runs on major service mesh ingress proxies (Envoy, NGINX) and Serverless infrastructure (Lambda), using Rust for versatile deployment. The platform enables security teams to monitor data flows, assess risks, and apply policies for sensitive data access, strengthening data security posture management.
The innovative technology’s focus on microservice protection distinguishes it from many competitors, as traditional defenses have difficulty scaling with newer microservice architectures. Additionally, LeakSignal differentiates itself with versatile, Rust-based software that runs on major service mesh proxies and Serverless infrastructure. Unlike competitors, LeakSignal also mitigates threats in real-time and collaborates with regulators like PCI DSS to meet modern infrastructure requirements.
Traction
While still early, LeakSginal has shown impressive growth with a strong sales pipeline consisting of various Fortune 500 companies. In addition to onboarding multiple paying customers, LeakSignal has started pilot partnerships with many companies and is in discussion with many more. This pipeline projects high growth in the near-term and ambitious projections for the years going forward.
Terms
Blu Ventures invested in LeakSignal’s $1.6mm Series Seed round through a SAFE note. The investment terms were mutually beneficial, and they set a strong foundation for future growth projections.
—
With the increasing adoption of microservices, LeakSignal has created an innovative solution to solve future security challenges. Their promising sales pipeline has created high growth projections for the company. Blu is excited to have partnered with Wesley, Issac, and the LeakSignal team. We are committed to supporting LeakSignal in advancing cybersecurity for modern digital infrastructures.
Comments