Reco Raises $55M to Tackle the Explosion of AI Agent Security

Overview

Reco, a security startup focused on protecting the expanding ecosystem of artificial intelligence agents, has secured $55 million in new funding. This latest investment round brings the company’s total capital raised to $140 million, reinforcing its position in a crowded market that is rapidly evolving alongside the proliferation of generative AI tools.

The funding comes just months after Reco closed a $30 million Series B in February 2026, signaling strong investor confidence in the company’s ability to address the growing complexities of AI governance. Key investors in this extension include AT&T, which participated through its venture arm, alongside existing backers Forestay and Quadrille Capital.

"The market demand right now for agent security is not only about the agent itself; it’s about the entire ecosystem end-to-end."

According to co-founder and CEO Ofer Klein, the surge in demand is driven by enterprises deploying AI agents faster than their security teams can track or govern them. The new capital will be directed toward hiring, sales expansion, strategic partnerships, and enhanced customer support as the company scales its operations globally.

Market Context: The Rise of AI Agent Sprawl

The term AI sprawl has become a standard concern for technology leaders, but it now extends beyond mere tool adoption to include the security implications of autonomous agents operating across enterprise networks. As companies deploy swarms of AI agents en masse, CISOs are facing a parallel explosion in vendor offerings promising to secure these digital workforces.

A review of public profiles from platforms like Crunchbase and PitchBook reveals at least two dozen startups currently selling some form of AI agent security. While the core promise—discovering and governing autonomous agents—sounds similar across the board, the technical approaches differ significantly.

• Tool Vetting: Some vendors focus on scrutinizing the external tools and APIs that agents utilize to perform tasks.
• Data Control: Others prioritize restricting the data permissions agents have, ensuring they cannot access sensitive information beyond their scope.
• Runtime Security: Companies like CrowdStrike are adapting their existing endpoint detection and response controls to cover the devices where agents run.
• Unapproved Usage: Other solutions aim to detect and resolve shadow AI usage, identifying agents that were deployed without IT approval.

This competitive landscape has prompted many existing players to pivot. Until last year, Reco primarily sold software to map and secure SaaS and AI platforms. Today, it has repositioned itself around a broader solution that leverages a context graph to connect agents to applications, people, accounts, and permissions. This holistic view allows security teams to visualize exactly what an agent can reach and immediately revoke access to anything deemed unnecessary.

Client Success Stories and Urgency

The urgency driving Reco’s growth is rooted in real-world discoveries made within major enterprises. Klein highlighted a case involving a Fortune 100 customer where the platform identified approximately 21,000 agents that the company was previously unaware of. This sheer volume illustrates how quickly AI tools can proliferate without centralized oversight.

Another significant finding came from a large financial services client, where Reco detected an agent configured by a former employee. This rogue agent retained the ability to access Salesforce and exfiltrate data to a domain outside the company’s visibility. Such incidents underscore the critical need for continuous monitoring and dynamic permission management.

"When agents reach production, the scale of their costs and risk goes from theoretical to full scale really quickly."

Chris Sestito, co-founder and CEO of security startup HiddenLayer, echoed these sentiments earlier this month. He noted that over 50 of his customers now have AI agents in production environments that touch critical systems and sensitive assets. Similarly, another AI security firm, Cymphony, reported discovering roughly 85,000 files that had become accessible to AI tools at a single U.S. public company.

These case studies suggest that the risk is not hypothetical. As AI agents move from experimental pilots to production environments, the potential for data leakage and unauthorized access escalates dramatically. Enterprises are increasingly realizing that traditional security perimeter models are insufficient for governing autonomous, network-accessing software agents.

Financial Performance and Future Outlook

Reco’s financial metrics reflect the high demand for its specialized security solutions. Klein stated that the company’s valuation has more than doubled since the Series B announcement in February, estimating it to be in the "high hundreds of millions" range, though he declined to provide exact figures.

Current annual recurring revenue (ARR) is in the double-digit millions of dollars, and the company expects this figure to triple by the end of the year. The startup currently serves more than 100 customers, with financial services companies accounting for approximately 40% of its business. This sector concentration aligns with industry trends, as regulated industries face stricter compliance requirements regarding data protection and AI governance.

Technology and Integration

A key differentiator for Reco is its extensive integration capability. The company currently connects with more than 280 applications, and Klein claims that new integrations can be added within days. This breadth allows Reco to cover not only the AI agents built directly into these apps but also those operating externally.

The platform utilizes a combination of browser and network signals to identify agents outside of directly connected applications. Once detected, the system provides controls to inspect prompts and tool calls, offering granular visibility into agent behavior. This approach addresses the "black box" problem that many enterprises face when deploying third-party AI tools.

Strategic Goals

The newly raised funds will support Reco’s aggressive growth trajectory. With a focus on expanding its sales force and strengthening partnerships, the company aims to capitalize on the impending wave of AI adoption across various industries. As the market for AI agent security continues to fragment and evolve, Reco’s comprehensive context-graph approach positions it as a central player in helping enterprises navigate the complexities of the new AI era.