The pitch is straightforward, but the engineering is not. A government wants to run a sensitive AI model on a public cloud. A bank needs to process customer transaction data for fraud detection without exposing the raw information. The traditional cloud model, where the provider manages the underlying infrastructure and has potential access to memory, creates a hard stop for these workloads. Modelyo, a Tel Aviv-based startup founded in 2024, is building for the procurement officers and CISOs who have to say no. Its platform, which it calls a Sovereign Confidential Cloud, is designed to let regulated entities use third-party cloud infrastructure without ever giving the provider access to the data or the encryption keys [Israel Hayom, October 2026].
The company’s core technical wedge is protecting data while it is being actively processed in memory and CPU, not just while at rest or in transit,a field known as confidential computing [Calcalist Tech, June 2026]. This means a workload can run on, say, AWS or Azure infrastructure, but the cloud provider cannot see the contents. For customers in Modelyo’s target sectors,governments, defense organizations, banks, healthcare, and critical infrastructure,this is the difference between adopting cloud-scale AI and analytics and remaining locked in expensive, on-premise data centers [Israel Hayom, October 2026].
A founding team forged in defense tech
The founders’ backgrounds read like a spec sheet for this specific problem. CEO Benny Meir is a reserve lieutenant colonel with over two decades in special operations and developing technological capabilities for the Israeli military [Israel Hayom, October 2026]. Co-founder and CTO Dr. Itzhak Aviv brings a deep background in defense communications, computing, and encryption systems from units like MATZOV and the IDF Communications and Computing Directorate [Israel Hayom, October 2026]. The third co-founder, Dr. Michael Kiperberg, specializes in secure virtualization and computing infrastructure [Calcalist Tech, October 2026]. This isn’t a team that discovered the problem of data sovereignty in a market report; they’ve lived the operational constraints of handling classified information.
That domain credibility appears to have been a key factor in the company’s recent fundraise. In October 2026, Modelyo closed a $17 million seed round led by U.S.-based investment firm OlivTree, with participation from investors Seth Merrin and David Phelps [Israel Hayom, October 2026]. The capital is earmarked for accelerating R&D and expanding commercial operations internationally, with a focus on markets including the United States, Europe, and Asia [Israel Hayom, October 2026]. The round is substantial for a seed, especially for a company just two years old, signaling investor belief in both the team and the urgency of the problem.
Traction and technical claims
Modelyo reports a workforce of 30 people, having grown its team by 73% over the past year [Calcalist Tech, October 2026] [Dealroom, Unknown]. The company says its technology is backed by more than 20 patents and patent applications [Dealroom News, Unknown]. Publicly, the most concrete indicator of market validation is a reported approval for "Roved 5 (Layer 5) and regulation," which allegedly allows Modelyo to bring classified data processing to the cloud for the Israeli government’s Nimbus Cloud project [Yehonatan Kfir, PhD - Wisery Labs | LinkedIn, retrieved 2026]. While specific named enterprise customers are not disclosed in available sources, the platform’s architecture is built for the most stringent requirements.
The table below outlines the founding team and their relevant expertise.
| Role | Name | Key Background |
|---|---|---|
| Co-founder & CEO | Benny Meir | Reserve lieutenant colonel; 20+ years in special ops and tech capability development [Israel Hayom, October 2026]. |
| Co-founder & CTO | Dr. Itzhak Aviv | Defense communications, computing, and encryption systems (MATZOV, IDF) [Israel Hayom, October 2026]. |
| Co-founder & VP R&D | Dr. Michael Kiperberg | Secure virtualization systems and computing infrastructure [Calcalist Tech, October 2026]. |
| VP of R&D | Artem Barger | Virtualization technologies, Linux, and IBM systems [Israel Hayom, October 2026]. |
Where the go-to-market gets hard
For all its technical promise, Modelyo’s path is lined with the classic hurdles of deep enterprise sales. The ideal customer profile is clear: a large, regulated organization with sensitive data and a cloud or AI initiative that is stalled by security and compliance concerns. This could be a defense agency, a global bank, or a pharmaceutical company handling clinical trial data. The sales cycle will be long, involve multiple stakeholders from security, infrastructure, and legal teams, and require navigating complex procurement processes. The company’s answer to this, beyond its founding team’s connections, appears to be a focus on high-touch support, including offering enterprise customers a named technical contact and 24/7 production support [Modelyo, Unknown].
The competitive set is also formidable, though not named in Modelyo’s sources. Realistically, it includes:
- Hyperscaler native services: AWS Nitro Enclaves, Azure Confidential Computing, and Google Confidential VMs. These are the incumbent infrastructure platforms, and they are rapidly advancing their own confidential computing offerings.
- Specialized security vendors: Companies like Anjuna, Fortanix, and Edgeless Systems, which offer software layers to enable confidential computing on public clouds.
- The status quo: The most significant competitor is often the internal data center team arguing to keep workloads on-premise, where perceived control is highest.
Modelyo’s differentiation rests on positioning itself as a sovereign, provider-agnostic layer that prioritizes control and compliance for the most sensitive workloads, potentially integrating more deeply with government-specific standards than a general-purpose cloud tool might.
The next twelve months
The $17 million seed round provides a multi-year runway to prove the model. The stated use of proceeds,accelerating R&D and international expansion,points to the key milestones ahead [Israel Hayom, October 2026]. Success in the next year will be measured less by headcount growth and more by landing a marquee, named customer outside of Israel and demonstrating a repeatable sales motion. The company will need to show that its platform can be deployed, integrated, and operated at scale by enterprise IT teams, not just its own engineers. Another milestone to watch is the evolution of partnerships with cloud providers or system integrators, which could become a crucial channel for reaching global regulated industries.
For the chief information security officer at a multinational bank or a technology director within a defense ministry, Modelyo is attempting to solve a very specific and high-stakes procurement problem. It’s not about choosing a cloud; it’s about being able to use one at all for the crown-jewel workloads. The bet is that their combination of patented confidential computing technology and founder-level operational security DNA can unlock budgets that were previously reserved for building and maintaining private infrastructure. The next phase is about translating that technical promise into contracted, production deployments.
Sources
- [Israel Hayom, October 2026] Modelyo raises approximately $17 million to secure next generation of cloud, AI | https://www.israelhayom.com/2026/10/22/modelyo-raises-approximately-17-million-to-secure-next-generation-of-cloud-ai
- [Calcalist Tech, October 2026] Modelyo raises $17 million to let companies use AI without exposing their secrets | https://www.calcalistech.com/ctechnews/article/rju100ow2ml?ref=thesaasnews.com
- [Calcalist Tech, June 2026] Data is the fuel of the new world. We must make sure it remains ours. | https://www.calcalistech.com/ctechnews/article/5d1bf7tei
- [Dealroom News, Unknown] Modelyo raises $17M to run AI in the cloud without exposing company secrets | https://dealroom.co/news/165044-modelyo-raises-17m-to-run-ai-in-the-cloud-without-exposing-company-secrets/
- [Yehonatan Kfir, PhD - Wisery Labs | LinkedIn, retrieved 2026] LinkedIn post regarding Modelyo approval | https://www.linkedin.com/in/dr-itzhak-aviv/
- [Modelyo, Unknown] Modelyo company website | https://modelyo.com/