New York and Israel-based Terra Security, a startup focused on AI-driven penetration testing, said it has raised $7.5 million in a fresh seed funding round.
The investment was led by SYN Ventures and FXP Ventures, with additional backing from Underscore VC and several prominent industry figures, including former Google CISO Gerhard Eschelbeck and the founders of Talon Security.
Founded in 2024, Terra is developing a platform that uses AI agents to simulate cyberattacks on web applications, a process known as penetration testing, to uncover vulnerabilities.
The company’s approach combines dozens of fine-tuned AI agents with human oversight, allowing for continuous and adaptive testing.
The idea is to replicate the behaviour of real-world attackers at scale, while still ensuring accuracy and contextual relevance through human review.
Traditional penetration testing typically relies on human consultants and is performed infrequently, often only for compliance purposes. It’s slow, expensive, and difficult to scale, particularly for large or rapidly evolving environments. Terra is betting that AI can fix that.
Unlike standard automated tools that run through pre-set scripts, Terra’s platform employs a multi-agent system that adapts to each client’s unique environment.
When a new vulnerability is identified or a change is made to a system, the platform automatically initiates targeted tests. Human experts supervise and fine-tune the process to maintain precision and reduce false positives.
“Pen testing shouldn’t be something organisations do once a year just to stay compliant.”
– Shahar Peled
Chief executive officer and co-founder Shahar Peled explained that the company aims to shift penetration testing from an occasional box-checking exercise into a continuous, proactive security practice.
“Pen testing shouldn’t be something organisations do once a year just to stay compliant,” he said. “It should be an ongoing process that actually helps you stay ahead of threats.”
Peled, a former vice president of business at Jit and CEO of Eternity, said his firm is already working with several Fortune 500 companies and plans to use the funding to expand its customer base, improve its AI agent capabilities, and add features such as ‘red teaming’ , an offensive simulation that tests the ability of systems to detect and respond to threats.
Investors said the potential lies in Terra’s ability to scale the benefits of ethical hacking, a method of finding vulnerabilities by thinking like attackers.
“Manual pen testing can’t keep up with the pace of cyber threats,” said Tsahy Shapsa, co-founder and managing partner at FXP. “What Terra is building isn’t just faster—it’s smarter.”
The company’s longer-term goal is to extend its platform beyond web applications to cover broader network security, turning its AI agents into full-spectrum offensive security tools.
Terra joins a fast-growing number of cybersecurity startups looking to merge human expertise with AI, especially as generative models and agentic systems show promise in mimicking complex decision-making processes.
With growing threats and a shortage of skilled security professionals, many industry insiders believe that automation, with oversight, may be the only viable path forward.
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