Osage Venture Partners is pleased to announce our investment in a $3.5 million Seed financing round for Arcanna.ai. The funding was led by our friends at Lytical Ventures, a leading cybersecurity investor, and supported by an esteemed group of angel investors including John Stewart, a former CISO of Cisco, who will join the company’s board. Arcanna.ai is an AI-enabled decision intelligence solution for cybersecurity professionals. By integrating with the existing tech stack and workflows of a Security Operations Center (“SOC”), Arcanna.ai can apply AI to automate rote tasks and augment human decision-making in response to novel attacks. We are excited to include Arcanna.ai in our newest portfolio as it strategically fits our investment focus on AI-enabled Future of Work innovations.
We believe Arcanna.ai is solving mission-critical problems for businesses. Cybersecurity professionals are in an untenable position as they struggle to cope with the growing number of cyber threats, data and alert fatigue, and an increasing rate of false positives, ultimately leading to team burnout and high turnover. Moreover, the shortage of skilled professionals in the industry is exacerbating the situation, with less than 0% unemployment and an estimated 3 million open cybersecurity roles expected by 2030. According to Gartner, nearly 70% of cyber professionals believe staffing shortages are a leading cause of enterprise vulnerability. Gartner analysts predict that this lack of talent and increasing human fatigue will be responsible for more than half of all significant cyber incidents by 2025. Furthermore, the “IT sprawl” in the security tech stack only adds to this strain, with the average organization using 40 different tools. This leads to alert duplication, manual workflows across disparate systems, and wasted time on false positives. The pandemic has only worsened this situation, with a nearly 50% increase in cyber threat volumes since the start of the pandemic. And we are now dealing with new attack vectors from the proliferation of AI.
While these challenges impact every segment of cybersecurity, the most prominent victim is the SOC, which is tasked with managing the entire security infrastructure of major enterprises while grappling with sky-high turnover rates amongst SOC analysts (estimated to be over 50% in the next year) and a slim supply of new talent. On average, a medium-sized SOC will lose four analysts annually and spend eight months finding and training one new analyst. SOCs need to strategically address labor gaps and enhance support for the current workforce by automating routine tasks. This automation not only facilitates quicker, higher-quality, and more consistent decision-making but also contributes to overall operational efficiency.
Enter Arcanna.ai: a no-code and AI-enabled decision intelligence platform that augments and automates human decision-making in the SOC. Unlike other solutions focused on threat detection and alerting, Arcanna.ai is designed to work independently of the specific SOC workflows and tools (e.g., SIEM, SOAR, XDR, etc.). Arcanna.ai’s platform offers customers, ranging from Fortune 500 enterprises to outsourced security vendors, the ability to easily train bespoke AI models on their unique IT environments and workflows, ultimately mimicking the decision-making process of the SOC analyst. These models learn and adapt to the SOC team process, augmenting the analysts’ decisions and thereby reducing the risk of mishandling, misinterpreting, or ignoring common alerts while simultaneously increasing the investigation capacity for novel alerts. The solution can automate routine tasks such as responding to common network alerts and identifying false positives. In cases where novel alerts cannot be automated, the platform provides predictive recommendations and human-in-the-loop workflows to augment and optimize human decision-making.
The platform helps reduce analyst fatigue by automating repetitive tasks and simplifying workflows that typically require the analyst to work across different systems. This can lead to a lower turnover rate, which directly impacts the cost of operating a SOC. In the event of inevitable staff turnover, Arcanna.ai can speed up the learning process for a new analyst by preserving the knowledge across the organization through explainable AI. Over time, each Arcanna.ai customer will amass a larger and larger library of automated responses and workflows, creating an increasingly autonomous SOC that can drive more efficient, higher-quality outcomes.
Arcanna.ai has achieved significant progress since its founding in 2019 and will be entering 2024 with considerable momentum. Despite limited investment in sales and marketing, the company has grown over 300% year-to-date and secured multiple six-figure contracts with large enterprises and governments. These accomplishments can be attributed to an exceptional team led by Arcanna.ai’s CEO, Peter Ruta. Peter is a former network engineer turned business development executive at Cisco, where he led the company’s Romanian business unit and later spearheaded a new division focused on innovative security services. Peter has recruited a top-notch team of engineering, security, and AI experts with whom we are excited to partner.
We believe this team and technology are uniquely positioned to bring AI-driven automation and human augmentation to the security industry and we are thrilled to be a part of an esteemed group of cybersecurity investors to support the company on this journey.