Enterprise AI adoption is accelerating faster than organizations can secure it. While 62% of companies now deploy agentic AI systems internally and 78% of employees bring their own AI tools to work, 97% of organizations lack proper access controls and 63% have no internal governance framework whatsoever. This disconnect has created a crisis: 80% of enterprises show signs of Shadow AI activity, with one in six data breaches this year traced directly to unauthorized AI usage. Ciphero addresses this security gap by providing the first AI Verification Layer purpose-built for the probabilistic, dynamic nature of modern AI systems. Unlike static DLP platforms and conventional firewalls designed for traditional software, Ciphero captures and verifies every AI interaction across employees, agents, and models in real-time, enforcing policies dynamically while detecting shadow AI usage invisible to legacy tools. Founded by second-time entrepreneurs Saoud Khalifah and Rob Gross, who previously built and sold Fakespot to Mozilla in 2023, the company operates as a sovereign control layer independent of AI vendors and cloud providers.
AlleyWatch sat down with Ciphero CEO and Cofounder Khalifah to learn more about the business, its future plans, recent funding round, and much, much more…
Who were your investors and how much did you raise?
Ciphero raised $2.5M in an oversubscribed pre-seed round. The round was co-led by Sovereign’s Capital and Chingona Ventures. Additional investors included BlueWing Ventures, Bullpen Capital, Everywhere Ventures, Fc Centripetal, Hustle Fund, Lotus Venture Partners, Propeller Inc, Viaka, and strategic angels.
Tell us about the product or service that Ciphero offers.
Ciphero is the first AI Verification Layer that captures, verifies, and governs all enterprise AI interactions – including Shadow AI and agentic deployments – to encourage safe and ethical AI usage for all organizations. Enterprises can use Ciphero to safely integrate AI into the workplace while preventing sensitive data leaks and maintaining compliance standards such as SOC 2. Ciphero tracks interactions across employees, models, and AI agents, enforces internal policies, flags risky activity, and ensures outputs are reliable. This gives organizations control and confidence in adopting AI safely and responsibly. Ciphero is protecting companies from AI data loss and, at the same time, increasing AI adoption throughout the enterprise.
We look to solve all the AI security needs across enterprises, and become that de facto standard platform that will solve any of the concerns that a company would have with security in regards to AI use, interactions, or models.
What inspired the start of Ciphero?
Ciphero was inspired by our desire to address AI accuracy and security challenges that existing cybersecurity tools could not manage. In line with the acceleration of AI models, we’ve noticed a staggering lack of truth and verifiability across AI tools and the dynamic risks of AI – especially in enterprise workflows.
We realized that static guardrails, such as conventional firewalls or DLP systems, cannot control AI, which operates in ways that today’s tools cannot predict. This led to the creation of Ciphero as an AI Verification Layer for AI, designed to monitor, verify, and govern AI interactions, including risks from shadow AI and improper use. Put simply, we identified that – without truth – enterprises cannot effectively adopt or innovate with AI.
How is Ciphero different?
The tools in use today are simply ineffective in monitoring AI because, unlike traditional SaaS, AI is dynamic and constantly evolving. Currently, more than 80% of organizations are showing signs of Shadow AI activity, which according to an IBM, has been the culprit behind one in every six data breaches this year.
Unlike existing enterprise-grade governance systems and DLP platforms – which are static, antiquated guardrails – Ciphero provides a real-time AI Verification Layer that captures, verifies, and governs every AI interaction across employees, agents, and models including agent-to-agent and model-to-model behavior. Ciphero is built natively for probabilistic and agentic AI systems, enforces AI policies dynamically, verifies outputs against internal truth sources, and operates as a sovereign control layer independent of AI vendors and cloud providers. It also detects and surfaces shadow AI usage that is invisible to incumbent tools.
All companies have cybersecurity issues, and AI has only increased the attack surface. The threats from uncontrolled AI usage are real: confidential information will leak, companies will rely on inaccurate data, and employees can access dangerous sites. But unlike available solutions, Ciphero is not just another watchdog — it’s how companies take back control of their AI.
What market does Ciphero target and how big is it?
Ciphero targets enterprise organizations that use complex AI workflows. We work directly with individuals managing the AI security, procurement, or deployment at the company – primarily working alongside CISOs, CIOs and CTOs at 1,000-plus employee organizations adopting AI at scale.
The AI in the cybersecurity market was valued at approximately $26.55B in 2024, and is projected to top $234B within the next seven years. This growth is driven by the increasing adoption of AI tooling at the enterprise level, which correlates to an increase in potential risk surfaces for sensitive data leaks. This underscores a growing demand for dynamic systems that can adapt in accordance with AI’s continued evolution.
What’s your business model?
Ciphero is perfect for any company that wants to get a complete picture of their AI usage, control it, and discover new areas for investment. We are focused on medium to large enterprises, but designed the platform so that anyone can easily get up and running on Ciphero. And unlike other AI solutions, we offer our customers a transparent pricing model that does not change based on how much they use Ciphero.
How are you preparing for a potential economic slowdown?
Truthfully, we are laser-focused on the mission at-hand – bringing truth and verification to enterprise AI usage. As second-time founders, we understand that market conditions are temporary, which is why it is critical to build with purpose, conviction, and a dedication to the long-term vision.
What was the funding process like?
This round was unique in that it was our second time raising capital – which allowed us to be incredibly prescriptive with our approach. As founders, it’s imperative to know what you don’t know, and assemble the team around you to fill those voids. That’s why we couldn’t be more proud to be working alongside Sovereign’s Capital and Chingona Ventures as our lead investors for this round. They bring a wealth of knowledge and expertise from their collective years of backing innovative teams, and serve as incredible strategic resources that will play a central role in Ciphero achieving its mission.
What are the biggest challenges that you faced while raising capital?
The biggest challenge is finding the right partners – not just investors. The ones who see your vision clearly and who will work in lockstep with you as a founder. Many startups aim to raise as much capital as possible as quickly as possible, but the real challenge is raising capital from the right partners.
What factors about your business led your investors to write the check?
Our group of investors were motivated to participate in this round for two key reasons:
The AI Verification Blindspot for Enterprises:
AI is undoubtedly the most influential technology of today. With this, there is a massive blindspot for enterprises trying to take some semblance of control over how AI is being leveraged in the workplace. The statistics tell the tale – 80% of organizations currently show signs of Shadow AI activity. Our backers were not only excited to help uncover this blindspot for enterprises with our dynamic system, but to also play a role in the future growth and acceleration of AI at the enterprise level.
Our Credibility As Second-Time Founders:
We previously founded Fakespot – the leading platform for consumers to identify fake reviews, counterfeit products and unreliable third-party sellers on major e-commerce platforms, which was acquired by Mozilla in 2023 in a successful exit. While this provided credibility to us as second-time founders, it was important to us to work with investors who were excited to support our vision with Ciphero because we are taking a novel approach to an important problem with AI that the major model companies are looking at as an afterthought as shown by OpenAI’s recent announcement.
What are the milestones you plan to achieve in the next six months?
Over the next six months, our goal is to work with our current pilot partners while deploying Ciphero to more enterprise partners throughout Q1 2026. We’ll also look to expand the adoption of Ciphero by launching new features to better equip organizations to monitor, verify, and govern AI interactions across employees, agents and models.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Early-stage companies without fresh capital should prioritize ideas that can be developed efficiently, test quickly, and demonstrate clear value to potential investors. This approach not only stretches limited resources, but also builds credibility and momentum, making it easier to attract funding when the opportunity arises.
Early-stage companies without fresh capital should prioritize ideas that can be developed efficiently, test quickly, and demonstrate clear value to potential investors. This approach not only stretches limited resources, but also builds credibility and momentum, making it easier to attract funding when the opportunity arises.
Where do you see the company going now over the near term?
In the near-term, we’re especially focused on helping companies identify their internal blind spots and make more informed decisions as it pertains to their AI usage. This will include our ongoing work alongside our list of select pilot partners and expanding deployments across our growing roster of enterprise partners.
What’s your favorite winter destination in and around the city?
NYC always has a lot of great destinations no matter the season, but we prefer to get out of the city and explore places that are only one to two hours away such as the Catskills, Hudson Valley, and even Cape May, NJ.
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