Consumer-focused privacy company Cloaked raises $375M as it expands to enterprise

The consumer cybersecurity industry is experiencing a breakthrough moment. While traditional players — from 1Password to NordVPN — specialize in individual aspects of data protection, a new generation of companies is emerging offering integrated solutions. Cloaked, a startup just four years old, has just raised $375 million in Series B and growth capital financing, sending a clear signal to the market: the future is not piece by piece, but an ecosystem.

The valuation of this financing was not disclosed, but the amount itself speaks volumes. For comparison, Bitwarden — a password manager with a similar profile — has raised approximately $100 million over the years. The fact that Cloaked raised nearly four times more in a single round suggests that investors see something fundamentally different in this model. This is not about another VPN or password manager, but about a comprehensive privacy strategy that changes how people protect their online identity.

From Fragments to a Coherent Ecosystem

Cloaked's story begins with a simple observation: the average internet user must juggle dozens of security tools, each requiring a separate account, password, and management. Passwords in 1Password, VPN in ExpressVPN, dark web monitoring somewhere else — this is not scalable for ordinary people, and certainly not for large organizations.

Brothers Arjun and Abhijay Bhatnagar founded Cloaked in 2020 with a vision that sounds simple but proved complicated in practice: creating one platform that handles a user's entire digital identity. Their first feature — the ability to create multiple identities with generated email addresses, phone numbers, and passwords — was already a solution to a real problem back then. Instead of providing their real email to every service, a user could generate a temporary, unique identity. This is not new — such solutions existed before — but the way Cloaked did it proved more intuitive and accessible.

Over time, the platform evolved. Data removal from internet databases, identity theft protection, VPN, and dark web monitoring were added. Each of these features solves a specific problem, but together they create something bigger — multi-layered defense that can be managed from one place. This is the key difference between Cloaked and competitors, who traditionally build around one feature and try to perfect it.

AI as a New Layer of Protection

Last year, Cloaked introduced AI-powered call screening — a feature that changes the game in fighting phishing and phone fraud. This is not just a spam filter that blocks numbers from a blacklist. Instead, the AI algorithm analyzes the conversation in real time, identifying suspicious patterns typical of scammers — changes in voice tone, emotional pressure, requests for personal data.

This feature is particularly important for the Polish market, where phone fraud is becoming an increasingly serious problem. A report from the Institute of Digital Security shows that the number of phishing attempts has increased by 300% in the past two years. Traditional solutions — blocking numbers, whitelists — are already insufficient because scammers use spoofing techniques, impersonating known institutions. Cloaked's AI tries to operate at a different level: it recognizes behavior, not just numbers.

This introduction of AI is symptomatic of the entire security industry. Every player — from Microsoft Defender to Kaspersky — is trying to integrate machine learning into their products. But Cloaked has an advantage here: its AI works on data from the user's entire ecosystem, giving it broader context for threat analysis. If an email was flagged as phishing, and then a similar attempt appears from the phone, the system has a chance to correlate it.

Entry into the Enterprise Market — A Strategic Turn

Until now, Cloaked was a consumer-focused company, concentrating on individual users. This financing changes that strategy. Expansion into the enterprise market is a logical next step, but not at all obvious. Many companies that succeeded in the consumer segment — from Slack to Figma — had difficulty transitioning to the corporate market because it requires completely different skills: support, integration with existing infrastructure, compliance.

For Cloaked, entry into enterprise makes sense, however. Today every large organization struggles with managing employee identities and protecting their personal data. Tools such as Okta or Azure AD handle authentication, but not the entire digital identity to the extent that Cloaked offers. If the startup can propose a solution that not only manages passwords and access, but also monitors whether an employee's data has leaked on the dark web, whether their phone is under attack — this could be a significant sales argument.

The $375 million financing includes both equity and growth financing. This combination suggests that investors want Cloaked to grow aggressively both organically and through acquisitions. In the security market, such strategies often mean buying smaller specialized companies — for example, a startup dealing with behavioral anomaly detection or firms offering advanced network monitoring.

Competition — Where Are the Leaders?

The competitive landscape is fragmented. Dashlane offers a password manager with dark web monitoring. Norton 360 has everything in one package, but its reputation comes from before the era of mobility and AI. McAfee is trying to reinvent itself. Bitwarden is open, but focused mainly on passwords. None of them have exactly the same combination as Cloaked — a consumer interface with advanced enterprise features, plus AI.

What sets Cloaked apart is not individual features, but their integration. When a user gets an alert that their email appeared in a breach database, the system can automatically generate a new email address for that account and change the password. When AI detects a suspicious phone call, it can send a notification to the mobile app. This is a workflow, not a collection of tools.

However, competition is not sleeping. Apple with each iOS version adds more security features — from monitoring password leaks to hiding email addresses. Google is doing the same in Android. If large technology corporations decide on full integration of identity protection in their operating systems, they could sweep independent apps off the market. This is a long-term threat to Cloaked and similar companies.

Challenges on the Growth Path

Having $375 million is a luxury, but also a responsibility. Cloaked must now prove that it can scale without losing what sets it apart — intuitiveness and coherence of user experience. The history of technology is full of examples of companies that raised huge sums and lost their identity in the transformation process.

The first challenge is retention and monetization. Security applications traditionally have the problem that users install them but rarely pay for them — or pay for the first year and then quit. Cloaked must find a business model that justifies a continuous subscription. Premium features, such as advanced monitoring or insurance, can help here, but it requires market education.

The second challenge is regulatory. The company operates in many countries, each with different regulations — from GDPR in Europe to CCPA in California. Adding enterprise services only complicates this. It must have SOC 2 certifications, ISO 27001, and possibly specific approvals for the financial or healthcare sectors. This requires time and money.

The third challenge is talent. To build advanced AI for threat detection, you need experts with experience in cybersecurity, machine learning, and infrastructure. Competition for such talent is fierce — Google, Microsoft, and Meta can pay more. Cloaked must build a culture and vision that attracts the best, even though it doesn't have the size of these giants.

Implications for the Polish Market

In Poland, the consumer security market is small compared to the West, but growing rapidly. Threats are real — from phishing to identity theft, waves of ransomware attacks on small businesses. Tools like Cloaked can find a rapidly growing niche, especially among freelancers, small businesses, and security-conscious individuals.

Poland also has a growing fintech and e-commerce sector, where identity protection is key. If Cloaked enters the Polish market with Polish customer support, educational materials in Polish, and integration with local banking systems, it could quickly gain significant market share. Currently, Polish companies often turn to Western solutions because they have no local alternatives — this is a field to plow.

The Future: Integration or Specialization?

Ultimately, this financing puts Cloaked at a crossroads. It can go the way of Nortons and McAfees — become a comprehensive security tool that does everything but nothing perfectly. Or it can go the way of specialization within an ecosystem — be the best at identity protection, with integration to other tools, not competition with them.

Given the investors' strategy and the way the company has developed so far, it seems that Cloaked is heading towards the first approach — being a comprehensive solution. This is risky, but if it succeeds, the market potential is enormous. The world needs better tools to protect digital identity, and the bundling model of services — instead of a collection of separate applications — is what consumers and enterprises actually want, even if they don't know it.