Modelyo raises $17 million to let companies use AI without exposing their secrets
The Israeli cybersecurity startup aims to protect data even while it is being processed in the cloud, targeting governments, banks, defense organizations and other institutions with strict security requirements.
Israeli cybersecurity startup Modelyo has raised approximately $17 million in a funding round led by U.S.-based OlivTree, with participation from Seth Merrin, David Phelps and other investors. Announced on Thursday, the funding will support research and development of the company’s confidential cloud platform and expansion of its international commercial operations. Founded in 2024, Modelyo employs 30 people and had previously operated solely on funding from its founders.
The company is developing a “Sovereign Confidential Cloud” platform designed to let organizations use cloud infrastructure, managed services and artificial intelligence systems while retaining control over their data and encryption keys. Its technology combines confidential computing, hardware-based encryption, continuous verification of computing environments and a zero-trust architecture to protect data not only while it is stored or transmitted, but also while it is being processed.
According to Modelyo, the platform enables organizations to run services on third-party cloud infrastructure without giving providers access to the contents of their data or their encryption keys. The company uses cryptographic verification to help customers verify that their data is protected, rather than relying solely on assurances from cloud providers.
The platform targets organizations with stringent security and data sovereignty requirements, including defense agencies, governments, banks, healthcare and pharmaceutical companies, and operators of critical infrastructure. As businesses increasingly adopt AI systems, particularly autonomous agents capable of taking actions independently, Modelyo aims to let them tap into cloud computing resources without relinquishing control over sensitive information and intellectual property.
“The world is moving at a pace we have never seen before. AI no longer just generates content. It is beginning to make decisions and operate systems, and will soon be part of almost every aspect of our lives, from banking to the cars we drive,” said Benny Meir, Modelyo’s co-founder and CEO.
“But as technology advances, security must advance with it. We cannot build tomorrow’s world on yesterday’s approaches to security. We founded Modelyo with the understanding that the world cannot afford to choose between innovation and security. There is no reason a company should have to surrender its secrets, its intellectual property or control over its systems simply to benefit from the power of cloud computing and AI,” he said.
Meir said the company aims to change the relationship between organizations and their technology providers. “Instead of asking customers to trust that their data is protected, we give them the tools to prove it cryptographically, even while the data is being processed, even when it is in someone else’s cloud, and even when AI systems are working with it.”
According to the company, its technology is backed by more than 20 patents and patent applications. The platform is designed to support a range of services, including databases, storage and memory, communications, email, video, AI models and other computing-intensive applications.
One of the company’s goals is to make confidential computing available through managed services, reducing the need for customers to build and maintain complex security systems themselves. Modelyo plans to expand its encrypted managed services, improve support for AI systems and autonomous agents, extend compatibility with GPU infrastructure and simplify deployment. The company says its platform is designed to be deployed in minutes through a relatively simple setup process.
Its ambitions extend beyond conventional enterprise computing. As AI becomes more integrated into physical environments, Modelyo sees potential applications in robotics, autonomous vehicles, industrial systems and smart infrastructure, where protecting the computing environment in which decisions are made may be as important as protecting the data itself.
Modelyo was founded following the October 7 attacks by three entrepreneurs with backgrounds in defense systems, encryption and computing infrastructure.
Meir, a lieutenant colonel in the reserves, has more than two decades of experience in special operations, establishing operational units and developing technological and operational capabilities. Co-founder Dr. Itzhak Aviv has experience in defense communications, computing and encryption systems, including work within MATZOV and the IDF’s communications and computing directorate. Another co-founder, Dr. Michael Kiperberg, specializes in secure virtualization systems, computing infrastructure and encryption.
Research and development is led by Artem Barger, whose background includes virtualization technologies, Linux and IBM systems.
Modelyo operates in Israel and international markets, including the United States, Europe, South Korea, India and the United Arab Emirates. The company also says it collaborates with NVIDIA, Intel and Google on technology initiatives intended to advance confidential computing on modern hardware and cloud infrastructure, including secure environments for resource-intensive AI applications.
Its target customers include governments, defense organizations, financial institutions, healthcare and pharmaceutical companies, critical infrastructure operators and large enterprises seeking to adopt cloud and AI services while retaining control over their data and intellectual property.
