Modelyo, an Israeli cloud security startup, announced funding of about $17 million, mostly from US investors. According to Israel Hayom and Techloy, US fund OlivTree led the round, with participation from Seth Merrin and David Phelps. The money will go to R&D and expanding sales abroad.
The problem
Sensitive organizations, such as governments, banks and defense bodies, want to benefit from the cloud and AI agents, but cannot allow the cloud provider, or anyone who breaches it, to see their data. In most cases data is encrypted when stored or sent, but exposed during processing.
The solution
Modelyo develops a "Sovereign Confidential Cloud" in which data stays encrypted even during processing, and encryption keys are not handed to the cloud provider. That lets an organization run models and AI agents on sensitive data without exposing it. The company was founded in 2024 by Benny Meir, Dr. Itzhak Aviv and Dr. Michael Kiperberg, and operates in Israel, the US, Europe, South Korea, India and the UAE.
Why now
Recent breaches, from GMO's cloud in Japan to leaks at government institutions, show why sensitive organizations hesitate to move data to the cloud. As AI agents get access to more data, demand for solutions that protect it even while in use will only grow.
