In some sense, Lili Infante shares the same worldview as a John Wick or James Bond movie—there are good guys, there are bad guys, and there’s a chase.
Infante grew up in Soviet Russia, where she and her family were deeply impacted by the unreliability and corruption of law enforcement as the Iron Curtain fell. Still a kid, she turned to American and British detective shows, like The X-Files and Murder She Wrote, to make sense of the world.
"You couldn't rely on law enforcement back there,” said Infante. “I grew up watching a lot of cop shows. After the collapse [of the Soviet Union], we got a lot more content, right? When I was a kid in Russia, I learned that I should be afraid of law enforcement, that they’re like the mob—that they have a lot of power and will hurt you. Watching those Western shows, though, I realized that’s the opposite of what it's supposed to be."
Infante ultimately became the law enforcement officer she watched on TV, immigrating to the U.S. and becoming a U.S. Department of Justice DEA Special Agent. She served for about a decade, and in that time became disillusioned with the government’s ability to match the speed of technological change.
"One of the main things that really alarmed me is the pace at which cryptocurrency and other technology was adopted by all these different criminal networks, including adversarial nation states, terrorists, and drug cartels,” Infante told Fortune. “I just realized that we, the good guys, cannot keep up with the bad guys anymore."
So, Infante struck out on her own, founding startup Cat Labs. And Cat Labs’ value proposition has the allure of what makes spy movie tools appealing; like James Bond’s wristwatch cameras, Cat Labs is building something complicated to do something fundamentally simple—fight tech-enabled crime. The company’s flagship digital asset-focused tool has a clear goal: to help defense and intelligence agencies find and recover crypto.
Cat Labs launched last year, and now investors (both existing and new) have doubled down. Cat Labs recently raised a $5.4 million seed round, Fortune can exclusively report. New York-based M13 led the round, and existing investors participated, including Castle Island Ventures, CMT Digital, and Hash3. This seed round brings the company’s total capital raised to $9.7 million. Cat Labs currently has 14 employees; that team has, over their collective careers, contributed to the takedown of more than 300 criminal entities, the company says.
The market opportunity for what Cat Labs does is law enforcement, yes, but that’s the starting point, said M13 managing partner Karl Alomar.
“The key was that we felt very confident that Lili could take this business, that should build that credibility,” Alomar told Fortune. “We believed she could get [this business] into law enforcement and into govtech as a whole, which would build a pretty good baseline of income and revenue for the company. Then, from there, there'd be plenty of opportunities to expand that offering beyond just the initial solution.”
Cat Labs is coming into the market at a time when cybercrime has been booming in conjunction with new technologies, first with crypto and now AI. Though the company’s core product is geared towards helping governmental agencies with their crypto investigations, Cat Labs says the process can be scaled to fight cybercrime much more broadly.
“It goes back to hackers, scammers, fraudsters using emerging technologies to scale exponentially and globally and at a pace that we've never seen before,” said Infante. “AI is really scary in this context. It really allows criminals to take some of the manual things they were doing to effectuate their crimes, like phishing campaigns or spam messages, and just make them so much smarter. They can make them look like they come from real people, and at scale.”
We’re talking about a world with more convincing phishing attacks and deepfakes, and more rapidly created synthetic identities. That said, Infante points out that scammers have often been some of the most effective users of new technology.
“Bitcoin was first adopted by drug dealers on the Dark Web,” said Infante. “The Tor browser was first mass-adopted by bad actors. It's the same thing here. When this empowering technology comes out, the bad guys are the first ones to use it. They don't have rules and policies to follow…That’s what we need to start thinking about and tackling, and we're not even close.”
But Infante’s idea is that we can get closer. A lot closer. Because like those detective shows she grew up with and the spy movies we’ve all seen, there’s always another case. There’s always another chase.
Elon update...Elon Musk's valuations are looking up, and in some cases are sky-high. Bloomberg reported that Musk's SpaceX is talking about pursuing a tender offer that would value the company at $350 billion. Meanwhile, Fidelity reportedly bumped up the value of both Musk's xAI and (perhaps more surprisingly) of X, formerly Twitter.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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