Bringing together cyber and deep tech to drive innovation in financial services
Earlier today, PayPal announced they will acquire Curv, a Team8 company and digital asset security platform.
Founded in 2018, Curv came out of stealth in 2019 backed by $6.5 million in seed funding led by Team8. It is the sixth company we’ve launched out of our Enterprise foundry and our first company offering a security by design solution devised to boost efficiency, security and growth in financial services. This marks our evolving view of cybersecurity which goes beyond securing existing business operations to becoming an enabler of new possibilities.
Security by Design for financial services
We met Curv co-founders, Itay Malinger and Dan Yadlin, in 2017, at the height of the last crypto bubble when bitcoin was approaching $20,000. Major news outlets were covering the daily price movement of cryptocurrencies, and the largest financial institutions were launching trading desks. At the same time, hackers broke into cryptocurrency exchange Coincheck and made off with nearly $500 million in digital tokens, highlighting security and regulatory concerns around bitcoin and other virtual currencies.
We quickly realized we could combine Itay and Dan’s strong background in cybersecurity and cryptography (both are alumni of Israel’s elite Talpiot military program) with Team8’s unique ideation model and our community of industry experts to solve the security problems around digital assets and help unleash their potential.
During our research into this domain, we discovered a paradox. Whereas digital assets (and blockchain) promised more efficiency and security, existing cybersecurity solutions were focused on adding walls that significantly limited their potential. Rather than decentralizing a new asset class, these solutions were centralizing digital assets and then using physical security measures that have been around for centuries. The result was that transactions in these assets were neither secure nor efficient — a problem we believed we could solve.
We set about solving the problem of securing digital assets to enable financial institutions to enter this new market.
This represents a shift from viewing cyber security as a preventative program that mitigates threats to seeing cyber as a business enabler. Given the increase in cyber attacks — fueled by increased hyperconnectivity — and the staggering financial and reputational costs of a breach, organizations are now embracing Security by Design — a new cybersecurity approach that builds in security from the outset, enabling businesses to pursue innovation while minimizing and managing cyber risk. And Curv is the perfect example of this.
Introducing bulletproof security and fuelling confidence.
The biggest security challenge in managing digital assets is the private key, which creates a single point of failure, introducing vulnerability to cyber attacks, insider threats and physical damage. For financial institutions and other companies eyeing the digital asset space, this use of private keys makes transacting and holding digital assets less attractive.
Itay and Dan began exploring multi-party computation (MPC) as a paradigm shift for this industry. At this point we brought in our chief scientific advisor, Professor Shafi Goldwasser, a Turing prize winner in the field of MPC and a deep tech expert (she runs privacy-enhancing data solutions portfolio company Duality), who validated the feasibility of the idea.
Six months later, Curv launched their unique, MPC-powered infrastructure. In this way they eradicated the single point of failure in a digital asset transaction, the private key, eliminating the threat of malicious intent, be it insider or cyber-breach, and making it safe and easy for market participants to transact and manage cryptocurrencies.
This bulletproof solution has fuelled increased confidence in the digital asset class, resulting in growing numbers of institutional entrants. Today, Curv is relied on by major crypto-native and traditional financial institutions alike, including firms such as BNP Paribas, eToro, Genesis and Solarisbank.
Bringing it all together
Curv, from my perspective, exemplifies our rigorous company-building and validation process — from research to ideation to growth. We join forces with phenomenal entrepreneurs with a unique and powerful platform of company builders who work for them. We weave in industry experts and potential users and their perspectives, based on our battle-tested de-risking methodology — all with the aim of tackling big problems with a high probability of success.
As Itay puts it: “Having Team8 as a partner during this journey was a key driver of our success. Their industry knowledge, unparalleled network and track record in building and backing the companies of the future, have been an enormous asset and we thank them for their support.”
Curv is a stand-out fintech success. In the last two years, they’ve raised around $30 million in funding, brought on dozens of major institutions, built the strongest R&D team in Israel focused on cryptography and financial engineering, and demonstrated that their technology is superior to any solution in the market today.
As always, it’s all about the people, and what a group of people has come together to build Curv! For us at Team8 this short but ultra-rigorous journey strengthened our faith in our own ambitious quest of Rethinking Venture. We join forces with passionate entrepreneurs, supporting them everyday with our dedicated platform of company builders and expose them to the invaluable perspectives of our community of industry leaders from day one. This process is anything but trivial. It requires a unique sense of trust in each other and in the process.
We are proud of the Curv team and once again reminded that it really does take a village!
Originally appeared on Medium