In 2017, Jyoti Bansal co-founded San Francisco-based security company Traceable with former investor Sanjay Nagaraj. WITH TrackableBansal, who previously co-founded application performance management startup AppDynamics, which was acquired by Cisco in 2017, sought to build a platform to guard customer APIs from cyberattacks.
Attacks on APIs – sets of protocols that establish how platforms, applications, and services communicate – are on the rise. In the first month of 2024, API attacks affected almost a quarter of organizations every week, an increase of 20% in comparison with the same period a yr ago. According to to the cybersecurity company Check Point.
Attacks on APIs take many forms, including attempts to disable API access by overwhelming it with traffic, bypassing authentication methods, and exposing sensitive data transmitted through vendor APIs.
“There is a lack of appreciation for the criticality of API security,” Bansal told TechCrunch, “as well as ignorance of the ever-growing API attack surface and resistance to adopting API security due to entrenched investments in security solutions that don’t directly address the problem API security.”
According to Bansal, more and more firms are using APIs thanks in part to the boom in generative artificial intelligence, but in the process they are unwittingly opening themselves as much as attacks. For one recent one testthe variety of APIs used by firms increased by greater than 200% between July 2022 and July 2023. Gartner meanwhile predicts that by 2026, greater than 80% of enterprises will use Generative AI APIs or have deployed Generative AI-enabled applications.
To protect these APIs, Traceable uses artificial intelligence to research usage data to grasp normal API behavior and detect activity that deviates from a baseline. According to Bansal, Traceable, which runs on-premises or in a fully managed cloud, can discover and catalog existing and latest APIs, including undocumented and “orphaned” (i.e. deprecated) APIs in real time.
Image credits: Trackable
“To detect modern threat scenarios, Traceable trained internal models by tuning large open-source language baseline models with labeled attack data,” Bansal explained. “Our platform gives IT teams the tools to discover, test, protect and detect API threats.”
The API security solutions market is quickly becoming crowded, with vendors equivalent to Noname Security, 42Crunch, Vorlon, Salt Security, Cequence, Ghost Security, Pynt, Akamai, Escape and F5 competing for customers. According to to research and markets, this segment is poised to grow at a compound annual growth rate of 31.5% from 2023 to 2030, driven by rising cybersecurity threats and demand for safer APIs.
But Bansal says Traceable is doing well, analyzing ~500 billion API calls per 30 days for ~50 customers and forecasting revenue to double this yr. Most of Traceable’s customers are enterprises, but Bansal says the company is investigating with governments about the pilot.
“Traceable is building a long-term, sustainable business, which from a financial perspective means we have a very healthy margin profile that continues to improve as our revenues grow,” he said. “Today we are not profitable by choice because we invest responsibly in this business… We focus on strategic investments that maximize return, not just expenses.”
To that end, Traceable announced today that it has raised $30 million in strategic investment from a group of sponsors that features Citi Ventures (a corporate entity of Citigroup), IVP, Geodesic Capital, Sorenson Capital and Unusual Ventures. Valuing Traceable at $500 million post-money and bringing Traceable’s total to $110 million, the latest funds will go toward product development, growing Traceable’s platform and customer engineering teams, and building the company’s associates program, Bansal said.
Traceable currently employs roughly 180 employees. Bansal expects the worker count to succeed in 230 by the end of 2024 as most of the latest investment will go towards hiring.
“Traceable was not a fundraising effort because we still had a significant cash flow prior to this investment,” Bansal said, adding that in addition to the latest funds, Traceable had secured a “significant” line of credit, “but we did receive significant investor demand.” With the combination of a strategic partnership with Citi Ventures and attractive investment terms, we have now decided to make a smaller investment to speed up our product and go-to-market initiatives before looking at more significant fundraising.”