Modelyo raises $17M to run AI in the cloud without exposing company secrets
What's the deal? Israeli cybersecurity startup Modelyo has raised $17 million in an early funding round led by US-based OlivTree, with participation from Seth MerrinDealroom has a profile for this one. Try Dealroom →, David PhelpsDealroom has a profile for this one. Try Dealroom →, and other investors. Founded in 2024, the company employs 30 people and had previously run solely on its founders' money.
What's the endgame? Modelyo is building a "Sovereign Confidential Cloud" that lets organisations use cloud infrastructure, managed services, and AI while keeping control of their data and encryption keys. Its technology combines confidential computing, hardware-based encryption, continuous verification, and a zero-trust architecture to protect data even while it is being processed.
How does it work? The platform runs workloads on third-party cloud infrastructure without giving providers access to data contents or keys, using cryptographic verification so customers can prove protection rather than trust it. Modelyo says its technology is backed by more than 20 patents and patent applications.
The company targets defence agencies, governments, banks, healthcare and pharmaceutical firms, and critical-infrastructure operators — organisations with strict security and data sovereignty requirements.
Why now? "AI no longer just generates content. It is beginning to make decisions and operate systems," said co-founder and chief executive officer Benny Meir. He argues that as autonomous agents take actions independently, companies should not have to surrender their secrets to benefit from cloud computing.
What's the product plan? The funding will support research and development and international commercial expansion. Modelyo plans to broaden its encrypted managed services, improve support for AI agents, extend compatibility with GPU infrastructure, and simplify deployment — which it says can be completed in minutes.
What could go wrong? Modelyo is competing on ground that major platforms are rapidly claiming: NVIDIA recently expanded its confidential-AI offering across cloud and bare-metal infrastructure, and Google made GPU-based confidential computing generally available. The open question is whether Modelyo can offer easier deployment and more customer control than hyperscalers now build in by default.
The signal: At $17 million, the round ranks in the 90th percentile among all-time early-stage security deals in Israel. It is an early bet on packaging hardware-backed protections into a managed sovereign cloud for regulated buyers — a market validated by the chip and cloud giants, but increasingly contested by them too.
Read more: calcalistech.com
Image credit: Generated with Gemini
