Private consumer-focused company Cloaked raises $375M as it expands into business

Consumer-facing security tools often focus on one type of approach, such as password protection, VPNs, or identity management. This forces people to use multiple tools to keep their data private. Closed, a company that instead offers a range of security and privacy solutions, announced Thursday that it has received $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 gave users the ability to create multiple identities with data such as emails, phone numbers, and passwords to log into different services without giving away their real data. Over the years, Cloaked has rolled out other services such as 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 fraudsters can use AI to get data or money in new ways.

“We’ve seen AI become better than humans at putting individuals at risk. And we see this as a problem for personal safety, family safety, and financial fraud. We also see [AI proliferating] about spam, fraud and phishing. And now it’s getting to this point where it’s about surveillance, how do you find a solution that balances these different aspects, and succeeds at this stage on the consumer side,” said the company’s CEO, Arjun Bhatnagar.

The startup aims to expand its AI-powered inspection protection to text messages, email, and browsing this year. It also checks for an AI agent that can take action on your behalf, such as changing the password of a service whose data has been compromised. Bhatnagar said the plan is to use AI in a safe way and not to transfer sensitive data to the cloud.

The company tells TechCrunch that it has seen 10x growth in the past year and now has more than 350,000 paying customers. It also protected 10 million identities and helped users clean up more than 1 billion records from data broker sites. Bhatnagar noted that since the call screening feature was launched last year, the app has processed more than 50 million scam or spam calls.

Cloaked is also now going out of business, offering employees the same protection as its consumer products, including identity and password management. This product provides employees with alerts about potential scams. Also, a company’s CISOs can look at the level of individual risks and examine aggregated data for records that have been cleaned or fraud stopped. And they can spot potential scams or data out there that could impact the company’s business.

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

Cloaked competes with the likes of 1Password, Gaurdio, Firefox, Proton, and Mozilla. The company even has overlapping products with one of its investors, DuckDuckGo, that offer 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 startups money without diluting equity to drive customer acquisition. The startup did not disclose the value or difference between equity and growth funds.

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

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

Crane believes that Cloaked has the right product to protect people and businesses in the new AI-led Internet and become a “household certification” for users in a world where there are many AI agents.

“In terms of the product, they’ve created tons of consumer space and what they want to be able to use for privacy,” he told TechCrunch over the phone. “Some people want to use everything out of the box, and some people want to use small pieces. And the beauty of Cloaked is that any consumer, whatever they care about, can approach it, and they can find the solution they want and need.”