Cleo Capital, an early-stage venture fund known for backing companies like AI firm Groq, fintech platform Ellevest, and fashion brand Hill House, has announced a new cybersecurity accelerator aimed at tackling the growing challenges of online threats.
The program is open to pre-seed and seed-stage startups worldwide. This remote, 12-week accelerator offers participants a standard investment of $250,000 in exchange for 7% equity. Cleo Capital plans to select up to ten companies for the inaugural cohort.
Sarah Kunst, Cleo Capital’s founder and managing partner, was inspired to launch the initiative after observing a surge in fraud across sectors she’s involved in, such as crypto, fintech, and even dating apps like Bumble, where she serves as an advisor. Her personal connection to the issue deepened after hearing how cyber threats had impacted her father and 90-year-old grandmother in small-town America. “When these issues reach smaller towns, you know it’s out of control,” Kunst told TechCrunch.
The urgency of addressing cybersecurity threats has grown with the rise of AI, which is making online scams more sophisticated and damaging. In 2023, the FBI reported that Americans lost over $12.5 billion to cybercrime, including romance scams and fraudulent legal schemes—more than double the combined losses of $11 billion reported for 2020 and 2021.
Despite the challenges, Kunst sees immense potential for innovation in the sector. Cybersecurity has become a magnet for venture funding, with demand rebounding after a slow 2023. Several startups, such as Chainguard, Huntress, and Bugcrowd, achieved unicorn status this year, highlighting the market’s promise.
“Cybersecurity investors often claim it’s a space dominated by enterprise startups, but I disagree,” Kunst said. “Most Americans face cybersecurity threats in their personal lives or through consumer devices. This is a massive opportunity we can’t afford to ignore.”
Kunst is currently seeking startups in consumer cybersecurity, the defense sector, and developer tools and infrastructure. One of her biggest concerns is the ease with which scammers can exploit victims. “You can pretend to be anyone on social media or a dating app,” she said.
To combat this, Kunst aims to address the “crushing burden” of the internet becoming increasingly “unusable” due to cybersecurity threats. She envisions solutions such as better online authentication tools to verify identities, alerts for potential scams, apps to protect against government-backed cyberattacks, and tools that startups can use to make their products more secure—all while prioritizing user privacy.
The application deadline for the accelerator is January 20, with the program kicking off on February 24.
“This is just the beginning of what will become a massive industry,” Kunst said. “We need and deserve an internet that fosters trust and security. Cleo is funding that transformation.”