AI Security Startup Dam Secure Raises $4 Million Seed Funding Led by Paladin Capital Group

January 2026 | Washington, D.C. / San Francisco: AI-powered cybersecurity startup Dam Secure has raised $4 million in a seed funding round led by Paladin Capital Group, a leading Washington D.C.–based investor specializing in cyber and AI technologies. The funding aims to address the rising security risks of AI-generated code entering production systems at scale.

Building AI-Native Security for the Next Generation of Software Development

Founded by Patrick Collins and Simon Harloff, Dam Secure is developing an AI-native application security platform that helps enterprises proactively manage risks associated with AI-assisted code generation.

With the surge of generative AI tools like ChatGPT and GitHub Copilot, organizations are deploying large volumes of AI-written code—often without robust oversight. This has created new classes of vulnerabilities that traditional application security (AppSec) tools fail to detect.

“Enterprises are rushing to adopt AI to increase developer velocity, but the volume of software being produced is overwhelming traditional application security processes,”
said Patrick Collins, Co-founder and CEO of Dam Secure.
“Existing security tools generate too much noise and cannot detect the deeper logic flaws that AI-generated code often introduces.”

The Hidden Risk: Logic Gaps in AI-Generated Code

According to industry research cited by Dam Secure, up to 50% of AI-generated code contains latent security vulnerabilities when not explicitly constrained. These weaknesses often stem from logic gaps—code that performs correctly but violates fundamental security principles such as access control or data encryption.

Unlike conventional vulnerabilities like SQL injections or cross-site scripting, these flaws are structural and context-dependent, making them invisible to traditional scanners and “scan-and-patch” methods.

Collins explained,

“Recent billion-dollar cyber heists and ecosystem-wide attacks demonstrate that these breaches no longer rely on classic bugs—they exploit valid but flawed logic. Our mission is to eliminate those blind spots before code ever reaches production.”

How Dam Secure Works: AI-Native Security Enforcement

The Dam Secure platform introduces a new paradigm for application security by allowing developers and enterprises to express security requirements in natural language.

For example, teams can define rules like “customer data must be encrypted at rest” or “no external API calls may send PII.” Dam Secure’s engine then automatically enforces these security requirements across large, evolving codebases during the software development lifecycle (SDLC).

This approach integrates seamlessly into AI coding workflows, enabling proactive and scalable security governance without slowing down development speed.

Backing from Cybersecurity Specialist Paladin Capital Group

The funding round was led by Paladin Capital Group, a globally recognized investor in cybersecurity and defense technology startups. As part of the deal, Mourad Yesayan, Managing Director at Paladin Capital, will join Dam Secure’s Board of Directors.

“The current approach to application security is struggling to keep pace with generative AI,” said Yesayan.
“As developers increasingly rely on AI-generated code, Dam Secure is setting a new standard for secure AI development by embedding security guardrails directly into the workflow.”

Paladin Capital’s decision to lead the round reflects growing investor conviction that AI-driven code generation represents both an opportunity and a major security challenge for enterprises worldwide.

Experienced Founders with Deep Security Expertise

Patrick Collins, Co-founder and CEO, previously served as an executive at Zip Payments and Secure Code Warrior and earlier built and exited 5th Finger, a pioneer in mobile technology.

Simon Harloff, Co-founder and CTO, led product security teams at Zip Payments and Secure Code Warrior, where he architected large-scale security frameworks. He now oversees Dam Secure’s core technology stack, focused on real-time code scanning, AI model alignment, and policy enforcement.

Strong Market Demand and Roadmap

Dam Secure reports growing interest from enterprise customers across multiple industries—including finance, e-commerce, and cloud-native software providers. The company plans to use the new funding to:

• Accelerate AI-native product development and R&D.

• Expand its engineering and go-to-market teams.

• Strengthen partnerships with cloud and enterprise software providers.

• Scale adoption of its AI security enforcement engine throughout 2026.

With a growing wave of companies deploying generative AI into production systems, the startup’s proactive security model is expected to gain traction among CISOs and DevSecOps teams worldwide.

About Paladin Capital Group

Founded in 2001, Paladin Capital Group is a multi-stage venture capital firm with offices in Washington D.C., New York, London, Luxembourg, and Silicon Valley. The firm focuses on cybersecurity, defense, and advanced technologies, investing in startups that address the critical needs of both commercial enterprises and government agencies.

Paladin has invested in over 85 companies since 2008, with a portfolio spanning AI security, threat intelligence, and cyber resilience. Its investments reflect a deep commitment to global security innovation and technological advancement.

Looking Ahead: Securing the Future of AI-Powered Development

As enterprises increasingly integrate AI co-pilots and coding assistants into software development, security has become a growing concern. Dam Secure’s AI-native platform represents the next evolution in application security, bridging the gap between developer productivity and responsible AI adoption.

With strong investor backing and a visionary team, Dam Secure aims to become a category-defining player in AI cybersecurity, ensuring that the next generation of software innovation remains secure, compliant, and trustworthy.