Legacy security solutions can no longer keep pace with modern business needs, and a SaaS security software company, Reco, is one a mission to eliminate the security gap caused by the proliferation of apps, AI, identities, data, and configuration challenges.
Following its 5x growth in 2024, Reco just announced it has raised a $25 million Series A extension from Insight Partners, Zeev Ventures, boldstart ventures, Angular Ventures, and new investor Redseed. This latest round brings Reco’s total funding to $55 million.
Reco was founded in 2020 by Ofer Klein, Gal Nakash and Tal Shapiro and has roots in Israel, and is now based in Miami, according to a PR representative. The company plans to use the new funding to scale its AI-native SaaS security platform and forge more channel partnerships.
Enterprises now run an average of 1,061 SaaS applications, a 26% increase over the past two years. At the same time, 80% of employees admit to using unauthorized SaaS and AI apps, commonly known as ‘shadow tools,’ which contribute to 35% of data breaches. The average cost of a data breach reached $4.88 million in 2024, according to IBM.
Reco says it addresses these challenges with an application discovery engine capable of identifying and classifying over 50,000 applications, providing visibility into an organization’s SaaS ecosystem. Its proprietary AI-driven SaaS App Factory currently secures over 175 applications and integrates new apps in 3 to 5 days, which is far faster than the months-long timelines of legacy providers, the company says. The new funding will go toward expanding the SaaS App Factory and deploying its Reco AI Agents to deliver alerts, identities and actionable insights.
“The adoption of AI apps and agents has made SaaS security more complex and dynamic than ever. Combine this with the proliferation of SaaS apps including shadow apps, and we’re seeing a growing gap between the reality of the ecosystem and what legacy SSPM tools can provide. Businesses need security solutions to be proactive vs just reactive — simplifying security without slowing down the business. We are enabling enterprises to contain SaaS sprawl, and this demand-driven growth is proof of how Dynamic SaaS Security is the future,” said Ofer Klein, co-founder and CEO of Reco, in a statement.
In addition to a fivefold increase in ARR over the past year, Reco has also experienced a threefold rise in customer numbers, the company said. Reco is adding new integrations weekly and is used by enterprises in the high-regulated financial services, insurance, healthcare, pharma, and tech.
“Reco has identified a critical security gap that legacy vendors typically cannot address. Reco is transforming SaaS security – delivering seamless execution that scales with enterprise needs and is fueled by deep customer trust. Their innovative approach to Dynamic SaaS Security and exceptional team position them to lead this rapidly expanding market,” said Praveen Akkiraju, managing director of Insight Partners.
Pictured at the top of this post: From left, Reco co-founders Ofer Klein, CEO; Gal Nakash, CPO; Tal Shapira, CTO. Photo by Elegant Photographics
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