MedCrypt raises $5.3 million as concerns for medtech cybersecurity grow

MedCrypt, a medical device cybersecurity software provider, has closed a Series A round of $5.3 million, led by Section 32, with participation from Eniac Ventures and Y Combinator. The funds will be used for sales and marketing, and for product development.

According to BDO, a consultancy, in the first half of 2018, US healthcare organisations reported 176 large-scale data breaches. It estimates the number of connected medical devices at 10 billion, and likely to reach 50 billion by 2028. The large number of vendors and the variety of technologies creates opportunities for criminals to penetrate the networks of vendors' customers, typically to steal patient health data. Since Q4 2017, claims BDO, the number of medical devices recalled as a result of corrupted software has increased 126%.

In October 2018, the FDA released a major update to its premarket cybersecurity guidance for medical devices. MedCrypt founder and CEO, Mike Kijewski said: "Internet-connected medical technology is entering the market at light speed, calling for devices to be secure by design, which leads to a heightened level of patient safety at all times."

MedCrypt's security software allows device vendors to use cryptography to secure data traveling between, or stored on, devices. MedCrypt then provides remote, real-time monitoring to alert medical device vendors of suspicious behaviour that may yield potential security threats.

MedCrypt was founded in 2016 by Kijewski, Brett Hemenway and Eric Pancoast, and is based in San Diego, California. The company is a graduate of the Winter 2019 Y Combinator accelerator programme. This financing round brings MedCrypt's total funds raised to $8.4 million.