TokenEx raises $100 million to secure company financial data


TokenEx Inc., a startup that helps companies secure the financial data they process as part of their business operations, today announced that it has raised $100 million in funding from K1 Investment Management.

E-commerce companies collect payment card details from customers when processing online purchases. Other companies, such as insurers, also collect financial data from customers. Ensuring that this information is stored and processed securely can be a challenge, even for a large company with significant in-house technical expertise.

TokenEx strives to make the task of securing financial information easy. The startup provides a cloud service that uses a cybersecurity technique called tokenization to help businesses avoid data breaches.

According to TokenEx, its cloud service can replace financial information in a company’s systems with algorithmically generated files called tokens. These tokens do not contain any sensitive data such as credit card numbers. The result, according to the startup, is increased security.

If a company replaces credit card numbers and other sensitive financial information in its systems with tokens, the risk of hacking is significantly mitigated. In the event of a data breach, hackers would only have access to tokens and not credit card numbers.

Along with improved cybersecurity, TokenEx says its service also offers a second benefit to organizations: simplified regulatory compliance.

Online retailers and other businesses that process payment card information as part of their business operations must comply with a cybersecurity standard called PCI DSS. Meeting the requirements set out in the standard can be technically difficult. Replacing payment card information stored in a company’s systems with tokens reduces the total amount of financial data it stores internally, making PCI DSS compliance easier.

There are instances where a business may need to access a financial record that it has replaced with a token using TokenEx’s service. In such scenarios, the company can make a request to TokenEx’s service through an application programming interface and it will retrieve the necessary data.

“As data breaches, privacy regulations and digital payment volumes have increased, the need for our solution has grown exponentially,” said TokenEx Founder and CEO Alex Pezold. “This round of funding will allow us to take our technology to new heights and create a world-class experience for all of our customers.”

TokenEx’s plans for its new $100 million funding round include growing its product, customer service, and account management teams. The startup will also expand its global operations.

Picture: Unsplash

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