Generative AI has vastly expanded the toolkit available to hackers and other bad actors. It’s now possible to do everything from deepfaking a CEO to creating fake receipts.
OpenAI, the biggest generative AI startup of them all, knows this better than anyone. And it has just invested in another AI startup that helps companies defend against these kinds of attacks.
New York-based Adaptive Security has raised a $43 million Series A co-led by OpenAI’s startup fund and Andreessen Horowitz, it announced Wednesday. This marks OpenAI’s first investment in a cybersecurity startup, OpenAI confirmed to TechCrunch.
Adaptive Security simulates AI-generated “hacks” to train employees to spot these threats. You might pick up the phone to listen to the voice of your CTO asking for a verification code. That wouldn’t be your actual CTO, but a spoof generated by Adaptive Security.
Adaptive Security’s platform doesn’t just spoof phone calls: It also covers texts and emails, while scoring which parts of a company might be most vulnerable and training staff to spot the risks.
The startup focuses on hacks that require a human employee to do something they’re not supposed to, like click on a bad link. These kinds of “social engineering” hacks, while basic, have led to huge losses — think of Axie Infinity, which lost over $600 million due to a fake job offer for one of its developers in 2022.
AI tools have made social engineering hacks easier than ever, co-founder and CEO Brian Long told TechCrunch. Launched in 2023, Adaptive now has over 100 customers, with Long saying positive feedback from them helped attract OpenAI to the cap table.
It doesn’t hurt that Long is a veteran entrepreneur with two previous successes: mobile ad startup TapCommerce, which he sold to Twitter in 2014 (reportedly for over $100 million) and ad-tech firm Attentive, which was last valued at over $10 billion in 2021 according to one of its investors.
Long told TechCrunch that Adaptive Security will use its latest funding mostly on hiring engineers to build out its product and keep up in the AI “arms race” against bad actors.
Adaptive Security joins a long list of other cyber startups working on the boom in AI threats. Cyberhaven just raised $100 million at a $1 billion valuation to help stop staff from putting sensitive info in tools like ChatGPT, Forbes reported. There’s also Snyk, which partly credits the rise of insecure AI-generated code for helping push its ARR north of $300 million. And deepfake detection startup GetReal just raised $17.5 million last month.
As AI threats become more sophisticated, Long has one simple tip for company employees worried about getting their voice cloned by hackers. “Delete your voicemail,” he recommends.
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Ballistic Ventures, the VC firm co-founded by Ted Schlein (known for his years at Kleiner Perkins), is raising $100 million for a new fund, TechCrunch has learned through a regulatory filing.
This week, the San Francisco-based VC firm filed with the U.S. Securities and Exchange Commission to raise the new fund, just over a year after closing its second fund, sized at $360 million.
Founded in late 2021, Ballistic targets cybersecurity startups. In an earlier interview, Schlein (pictured above, fourth from left to right) told TechCrunch that the Ballistic crew, with its years of experience, is very hands-on. They take board seats, help with hiring and with landing the first 10 customers, talking to their portfolio founders “many times a week.” The team brings a large network of contacts to their portfolio companies, Schlein said.
Alongside Schlein, the firm has four other general partners: Kevin Mandia, Barmak Meftah, Jake Seid, and Roger Thornton. Last year, it appointed former USPS CISO Gregory Crabb as CISO-in-residence to fill the position of David Hahn, who was promoted to Ballistic’s CISO operating partner.
Ballistic has so far invested in 59 startups, per Crunchbase, with GetReal Labs’ $17.5 million Series A round being the latest — announced last week. The firm also made six exits.
Venture funding in cybersecurity grew 43% year-over-year to $11.6 billion in 2024, with 639 deals closed, compared to 821 in 2023, per a report by Crunchbase News.
Ballistic declined to comment on the fundraising.
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Zach Yadegari, the high school teen co-founder of Cal AI, is being hammered with comments on X after he revealed that out of 18 top colleges he applied to, he was rejected by 15.
Yadegari says that he got a 4.0 GPA and nailed a 34 score on his ACT (above 31 is considered a top score). His problem, he’s sure — as are tens of thousands of commenters on X — was his essay.
As TechCrunch reported last month, Yadegari is the co-founder of the viral AI calorie-tracking app Cal AI, which Yadegari says is generating millions in revenue, on a $30 million annual recurring revenue track. While we can’t verify that revenue claim, the app stores do say the app was downloaded over 1 million times and has tens of thousands of positive reviews.
Cal AI was actually his second success. He sold his previous web gaming company for $100,000, he said.
Yadegari hadn’t intended on going to college. He and his co-founder had already spent a summer at a hacker house in San Francisco building their prototype, and he thought he would become a classic (if not cliché) college-dropout tech entrepreneur.
But the time in the hacker house taught him that if he didn’t go to college, he would be forgoing a big part of his young adult life. So he opted for more school.
And his essay said about as much.
He posted the whole thing on X. It repeatedly said how he never planned on going to college and documented his experience making ever more money as a self-taught coder. He wrote how VCs and mentors reinforced the idea that he didn’t need college.
All until he had an epiphany: “In my rejection of the collegiate path, I had unwittingly bound myself to another framework of expectations: the archetypal dropout founder. Instead of schoolteachers, it was VCs and mentors steering me toward a direction that was still not my own,” he wrote.
College would help him “elevate the work I have always done” so he now wanted to learn from humans, not just books and YouTube.
His penultimate paragraph declared, “Through college, I will contribute to and grow within that larger whole, empowering me to leave an even greater lasting, positive impact on the world.”
Despite the grades, test scores, and real-world achievements, he was rejected by Stanford, MIT, Harvard, Columbia, Princeton, Duke, and Cornell, among others. He was, however, accepted by Georgia Tech, University of Texas, and University of Miami.
Still, his tweet about the many rejections went viral, with over 22 million views, more than 2,700 retweets and upwards of 3,600 comments.
Many of the comments blasted the essay as “arrogant,” saying that was the problem.
Others blasted the college acceptance system as the problem (with all the usual criticisms there).
Probably the more insightful comments were the ones pointing out that colleges are looking for candidates who seem thirsty for education and will likely graduate. His essay read like he had barely convinced himself to attend.
Even Y Combinator’s Garry Tan weighed in on X, not with feedback for Yadegari, but with his own “confession” that he was also widely rejected and waitlisted on his college apps “because I rewrote my essays after reading Ayn Rand’s ‘The Fountainhead.’” and’s Objectivism philosophy appears to be a permanently controversial topic, it seems. (Tan, however, did get into and attended Stanford.)
Yadegari tells TechCrunch that he’s still figuring out his next steps but was fascinated by the response his X post received. “It was interesting to see many different perspectives, but ultimately, I’ll never know exactly why I was turned down. At the end of the day, when I wrote my essay, I hoped admissions offices would perceive me as authentic because that’s all I ever want to be.”
Yadegari also says he’s come to realize that business success isn’t the greatest achievement of his 17-year-old life. Having obtained some of that, “I realized that life was not just about financial success,” he said, “it is about relationships, and about being a part of a larger community.”
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Thatch, a startup that aims to transform the health insurance experience for employers and employees alike, has raised $40 million in a Series B round of funding, it tells TechCrunch exclusively.
Index Ventures led the financing, which included participation from existing backers Andreessen Horowitz (a16z), General Catalyst, SemperVirens, PeopleTech Partners, The General Partnership, and new investor ADP Ventures. In total since its October 2021 inception, Thatch has raised $84.5 million in equity funding.
While the San Francisco-based startup declined to reveal its new valuation, co-founder Adam Stevenson told TechCrunch that it was about three times higher than its Series A (Thatch raised $35 million in a Series A round led by General Catalyst in February of 2024).
Thatch helps employers offer Individual Coverage Health Reimbursement Arrangement (ICHRA) to employees. ICHRA is a relatively new insurance option, in effect as of 2020.
So what’s the difference between an ICHRA and HRA? A typical HRA exclusively covers out of pocket medical expenses such as therapy, braces, and prescriptions.
The ICHRA allows employers to also use the funds to cover individual medical insurance.
“So imagine each employee gets $1,000 a month — one employee might buy a Kaiser HMO plan for $800 a month and spend the remaining $200 month on therapy, while another employee might spend $1,000 a month fully on a United PPO plan. Previously, HRAs could not pay for insurance,” CEO and co-founder Chris Ellis explained.
Thatch hosts a marketplace that allows employees to choose from different health insurance options, as well as offering a debit card that allows them to spend their remaining balance. Employees in turn use that budget through Thatch to choose healthcare plans they want, including medical, dental, and vision. If there are leftover funds, they can use that to pay for treatment costs. With Thatch, if an employee grows unhappy with one insurance carrier, they can switch, the founders said.
“We see about ~50% of members carry a balance left over of around $250 month on average,” Ellis told TechCrunch. Those employees then have the ability to use the extra balance to pay for things that health insurance doesn’t cover, he added.
In the founders’ view, since the regulation is relatively new, there is plenty of room for innovation. For example, ICHRA employee classes, Stevenson said, allow businesses to customize their health benefits by grouping employees based on factors like hours worked or geographical location. Such flexibility lets employers tailor health plan offerings to different classes.
“It makes no sense for healthcare to be dependent on your employer,” said Stevenson, who serves as the company’s president. “Rather than selecting one-size-fits-all benefits for their teams, ICHRA instead allows businesses to give their employees tax-free money to spend on healthcare in the way that works best for them.”
Thatch has partnered with QuickBooks so that the company “can embed and distribute ICHRA directly within” its own product, Ellis said. This means that companies that use QuickBooks can easily set up ICHRA accounts for employees. Thatch is in the process of building a similar offering for ADP, which hasn’t launched yet.
While Stevenson declined to reveal revenue figures, he said Thatch has onboarded “over a thousand companies” over the last 18 months and that revenue grew 8x year-over-year. (The company launched its offering in August of 2023). Customers include Dave’s Hot Chicken, Jersey Mike’s, PeopleTech Partners, Fragment.dev, Ferry Health, and Friends of Bonobos.
The two founders’ experience is primarily in healthcare. Ellis started his career as a cancer researcher at MIT. He then founded the U.S. sales team at Sophia Genetics, a clinical software startup, before working on the software product team at Agilent Technologies, a large testing equipment company.
Stevenson spent four years at health insurance giant Humana, while launching a few bootstrapped SaaS companies on the side. He eventually landed at Stripe, where he started and led different customer engineering teams for seven years.
The pair said they came to realize that making ICHRA work would ultimately be tied to solving fintech problems such as managing budgets, issuing funds, remitting and tracking payments, and handling adjudication. So the company worked to recruit employees from companies such as Stripe, Rippling, and Ramp to “to create all of the financial and operational infrastructure necessary to abstract away all of the messiness of ICHRA.”
Thatch also has recently hired Gary Daniels, the former CEO for UnitedHealthcare’s Pacific Northwest division, as its chief growth officer.
“He’s joining because he believes ICHRA is the future of employer-sponsored healthcare,” Stevenson told TechCrunch.
As of March, Thatch had 72 employees.
Jahanvi Sardana, partner at Index Ventures, likened the process of choosing a health plan to “trying to buy a house without knowing the price or details.”
“You’re handed a limited set of options and hope for the best,” she told TechCrunch “Thatch makes benefits work like a modern marketplace — transparent, personalized, and designed around choice. They’re not tweaking the system — they’re replacing it with something fundamentally better. It’s the kind of shift that, once it happens, will feel obvious in hindsight.”
Sardana believes that Thatch isn’t just tackling benefits — but also a technology and payments problem.
She said: “Every piece — plan selection, payments, reimbursements — is designed around the end user…That kind of shift doesn’t happen by accident…When the best companies in the world want your product before you even knock on their door, you know you’re building something game-changing.”
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Calling founders, VCs, and startup experts — share your scaling strategies!
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This is your opportunity to share your expertise and guide founders through the challenges of scaling. Step up and stand out! Apply now for a chance to compete in the Audience Choice round, where TechCrunch readers vote on who they want to see leading a roundtable or breakout session!
Help founders navigate the challenges of growth by speaking at TC All Stage. Visit the event page, hit the “Apply to Speak” button, and submit your topic. If chosen, you will have the opportunity to share your insights on scaling startups at any stage.
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Lead the way, inspire growth, and make an impact! Take center stage and guide startup leaders through the complexities of scaling while building your reputation as a respected industry expert. Apply now — the clock is ticking! TC All Stage is on July 15, but speaker applications close on April 18. Submit your application and join us for this incredible event!
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TechCrunch All Stage — the ultimate founder summit — is shaping up to be a powerhouse event where 1,200 founders and VCs across all stages will come together to forge meaningful connections and gain practical insights they can immediately apply to scale their startups. Join us on July 15 at SoWa Power Station in Boston and be part of the conversation with scaling experts. Register now and save up to $210! Save even more when you register for a group of four or more.
Adding even more value to this already-packed agenda, we’re excited to announce that Jahanvi Sardana, partner at Index Ventures, has joined the breakout session lineup. Sardana will dive into the critical elements of assessing total addressable market (TAM), revealing how the best startups don’t just size markets — they create them.
Using case studies from high-growth companies such as Datadog, Adyen, Wiz, Shopify, and Airbnb, she will explore how these businesses identified emerging trends, eliminated friction, and expanded their TAM beyond initial projections. This session is essential for founders aiming to build companies that will shape the future of their industries.
This is your opportunity to get direct answers from Jahanvi on scaling challenges and learn what it truly takes to propel your business forward.
As a B2B investor, Jahanvi Sardana specializes in cybersecurity, enterprise software, and fintech, investing across seed to pre-IPO stages. She thrives on partnering with founders who embody grit — the secret ingredient that sets high performers apart. It’s the perfect mix of passion, persistence, and stamina that turns visionary ideas into reality.
Prior to Index Ventures, Jahanvi was at Stripes, a growth equity firm in New York, where she focused on cybersecurity, fintech, and SaaS investments. Her career began in private equity at Aquiline Capital Partners.
Don’t miss this session at TC All Stage — plus more led by industry leaders like Charles Hudson, founder and managing partner at Precursor Ventures; Brandon Krieg, co-CEO and co-founder at Stash; and many others. This is your opportunity to ask scaling questions, build game-changing connections, and, for VCs, discover the next big investment. Register now and save over $200 on a Founder or Investor Pass!
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