Defakto Secures $30.75M to Pioneer Non-Human Identity Sector

Silicon Valley-based startup Defakto, which specializes in non-human identity management, has successfully secured $30.75 million in Series B funding. This capital will be directed towards enhancing features related to artificial intelligence identity detection and improving integrations with cloud providers. The funding reflects a growing recognition of the importance of identity governance for AI workloads.

According to Danny Oliveri, co-founder and CEO of Defakto, their platform is designed to oversee the entire life cycle of machine identities, emphasizing governance, discovery, and remediation. “We aim to expand AI identity capabilities and forge deeper connections with major cloud providers and frameworks,” he explained in a recent interview with Information Security Media Group. Oliveri underscored the necessity for market education on the critical nature of non-human identity as a significant security concern.

Since its inception in 2022 as Spirl, Defakto has witnessed rapid growth, employing 32 staff members and successfully closing a $13 million Series A funding round in April 2024. Oliveri, who transitioned to lead the company in December 2024 after a tenure at Oracle, highlighted the commitment to identifying and addressing risks presented by unauthorized machine identities. The firm is transitioning from simply terminating access for risky identities to enhancing earlier stages in the identity management pipeline.

The latest funding round, led by Ross Fubini of XYZ Capital, is primarily aimed at expanding product capabilities, thus allowing Defakto to better serve an increasing client base. “Our projections guided this fundraising to ensure we maintain our edge in a fast-evolving area,” Oliveri noted. He emphasized the need for responsible partnerships, asserting that selecting the right collaborators is vital, especially given the pressures and complexities surrounding identity management in a multi-cloud landscape.

As companies engage in more comprehensive governance over machine identities, discovery becomes crucial. It is imperative to identify not just the locations of these identities but also to discern their behavior, interrelations, and associated risks. This visibility is essential, as organizations increasingly demand governance frameworks that parallel those available for human identity management. “You can’t have governance without discovery,” Oliveri remarked, reinforcing that the focus must be on fulfilling organizational needs in this domain.

Oliveri also pointed out that while AI agents and large language models are increasingly prevalent, their governance implications remain ambiguous. Defakto seeks to collaborate closely with enterprise clients to pinpoint current AI applications that necessitate oversight, steering clear of speculative features that might not address real-world needs. “Understanding where AI fits into the identity management landscape is a priority for us,” he stated.

The complexities of modern identity management frameworks necessitate a multifaceted approach. As enterprises grow more dependent on multiple cloud environments, interoperability supersedes exclusivity in provider partnerships. Defakto projects that by 2027, it will not only lead the market but also manage vast numbers of machine identities across its client base, emphasizing metrics such as 100% net revenue retention as indicators of success.

Ultimately, the journey towards becoming a pivotal player in non-human identity management is grounded in strategic partnerships and a commitment to evolving product capabilities. As organizations grapple with the challenges posed by machine identities, Defakto is positioning itself as a critical ally in navigating these waters.