Consumer-focused privacy company Cloaked raises $375M as it expands to enterprise

Consumer-facing security tools often focus on one kind of modality, such as password protection, VPNs, or identity management.

This forces people to use multiple tools to keep their data private.

Cloaked, the company that instead offers a bundle of security and privacy solutions, announced on Thursday that it has secured $375 million in Series B funding and growth financing to expand its consumer offering and move into 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 to log in to different services without providing their actual data.

Over the years, Cloaked rolled out other services like data removal, identity theft insurance, VPN, and dark web monitoring. Last year, it introduced AI-powered call screening.

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

“We’ve seen AI get better than humans at compromising individuals. And we look at this as a problem of personal safety, family safety, and financial fraud. We also see [AI proliferating] around scam spam and phishing. And it comes down to now in this age around surveillance, how do you find a solution that fits between these different aspects, and we’re winning in this category from the consumer side,” the company’s CEO, Arjun Bhatnagar, said. The startup intends to expand its AI-powered screening protection to text messages, email, and browsing this year.

It’s also testing an AI agent that could take actions on behalf of you, such as changing the password for a service whose data has been compromised.

Bhatnagar said the plan is to use AI in a safe manner and not pass on sensitive information to the cloud.

The company tells TechCrunch it saw 10x growth last year and now has more than 350,000 paying customers.

It has also protected 10 million identities and helped users clean up more than 1 billion records from data broker sites.

Bhatnagar noted that since the launch of its call-screening feature last year, the app has processed over 50 million scam or spam phone calls.

Cloaked is also now rolling out to the enterprise, offering employees some of the same protection as in its consumer products, including identity and password management.

This product gives employees alerts about potential scams.

Plus, company CISOs can look at the risk level of individuals and check aggregated data of records cleaned or scams stopped.

And they can see potential scams or data out there that can impact the company’s business.

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

Cloaked competes against the likes of 1Password, Gaurdio, Firefox, Proton, and Mozilla.

The company even has some overlapping products with one of its investors, DuckDuckGo, which offers 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 financing through its Customer Value Fund, which provides funding to startups without diluting equity to fuel customer acquisition. The startup didn’t disclose the valuation or the divide between equity and growth funding.

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

Mark Crane, a partner at General Catalyst, said that the venture has invested in the startup in all rounds but led a round for the first time.

He said that Cloaked’s bouquet of security and privacy offerings suits a wide range of consumers.

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

“In terms of the product, they have built tons of surface area for the consumer and what they want to be able to use for privacy,” he told TechCrunch over a call.

“Some people want to use everything out of the box, and some people want to use smaller pieces.

And the beauty of Cloaked is that any consumer, anything they care about, they can approach it, and they can get the solution that they want and need