Auto startup Upstream has raised $62M in Series C funding to bring its business to scale Cloud-based Security

Back in 2015, researchers Charlie Miller and Chris Valasek remotely hacked into a Jeep Cherokee driven by a Wired reporter, Andy Greenberg, in an attempt to warn the auto industry of potential pitfalls in their software and inspire legislation around automotive cybersecurity. That was not all. Fiat Chrysler (the owner of Jeep) ended up recalling over 1.4 million cars and paying $105,000,000 in fines to National Highway Traffic and Safety Administration.

Apart from the damage to Jeep’s image, Yoav LEVY, cofounder and CEO at automotive cybersecurity firm Upstream estimates that this move cost Jeep over $1 billion in recall losses. Upstream, an Israeli-based cybersecurity company that is based in Israel announced on Tuesday a $62 million Series C financing raise. This will be used to strengthen its cloud-based automotive security and prevent remote hacks.

TechCrunch’s Levy explained that “from the automaker’s cloud, I monitor all data being sent towards the vehicle before it actually gets it.” We analyze the connected car data, as well as telematics data being uploaded to the vehicles. Data from mobile phones or updates over the air is also analyzed and we look for anomalies.

The company stated that Upstream plans to increase its security operations and use the new funds to grow its offering in data analytics as well as predictive analytics, business intelligence, and insurance telematics. Levy stated that Upstream finds many anomalies in data it analyses, which are not related to cybersecurity. This is an opportunity to create additional apps targeted at OEMs and provide more insights.

That said, Upstream might do just fine by focusing exclusively on automotive cybersecurity, a market that is projected to increase from $1.9 billion in 2020 to $4 billion in 2025. This growth is partially due to reinforcement mandates. The World Forum for Harmonization of Vehicle Regulations (WP 29) has issued cyber vehicle regulation compliance that requires manufacturers selling cars in Europe, Japan and Korea to monitor their vehicles 24/7 with a vehicle security operations center (VSOC). A VSOC, or vehicle security operations center, is a controlled room that houses analysts who monitor the vehicles, infrastructure, cloud, and data at all times. Despite not having cybersecurity regulations in the U.S., automakers are still keen to continue producing their products and branding image to avoid the same fate that Chrysler-Fiat.

Image Credits: Upstream. The company offers automakers a dashboard with cloud-based analytics.

Upstream also offers VSOC, a cloud-based dashboard and analytics tool. Levy said that the company has approximately four million connected cars from six OEMs across America, Europe, and Japan. Levy expects this number to rise as connected cars become more common.

Levy stated that “cars are becoming more connected every year, and OEMs have doubling the data they collect each year.” It’s not just the car and cloud that is connected, it’s also the vehicle-to-vehicle network, more advanced modules and computers within the car, which are performing edge computing, ADAS, computer vision and level two and three autonomous. Given the sheer complexity of connectivity, hackers will be able to exploit these bugs and inject their code.

Although the thought of someone stealing your car and blasting music while it smashes into walls is frightening, Levy said that most hackers don’t want violence or your car. They are after your data. It is particularly common for fleets and often manifests itself in ransomware attacks.

Levy said, “Think about it as Christmas Eve. You’re a last mile delivery company. And suddenly your doors and engines are locked.” This is bad for business.

Levy states that cloud-based security is a great option. Instead of looking into just one vehicle at a time you can see the entire fleet, all connected devices and any malicious data that may be incoming via the internet.

Upstream is currently focusing on convincing auto manufacturers of the need for this technology. However, Levy believes that fleets will be the company’s next major opportunity within the next one year.

The company raised $105M in the latest round since it was founded in 2017, and has now raised $105 million total. Mitsui Sumitomo insurance led the Series C and was joined in this round by I.D.I. The Series C was led by Mitsui Sumitomo Insurance and included new investors I.D.I. The round also included existing investors Glilot Capital and Delek US, as well as Volvo Group Venture Capital, Nationwide Venture Capital, Salesforce Venture Capital, Nationwide Venture Capital, Nationwide Venture Capital, Delek US, and other.

Levy stated that some of the company’s historic investors were also its customers. Alliance Ventures (Renault Nissan, Mitsubishi), Volvo Group Venture Capital and Hyundai are the private investors in Upstream. Nationwide Insurance, Salesforce Ventures as well as Nationwide Insurance provide funding.

Publiated at Tue 24 August 2021, 13:31:03 (+0000).

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