Netonomy wants to win in the race to secure the smart home

This week’s KRACK vulnerability brought to light many of the fears around connected gadgets proliferating in our homes. Perhaps the biggest one being that such gadgets could lead to some epic security flaws. KRACK, which is a flaw in the Wi-Fi protocol and requires an update to both router and client-side devices, is just the latest in a series of vulnerabilities disclosed in the last few years.

Others have targeted ZigBee, which is popular for sensors and lights, as well as Bluetooth, which is popular for wearables and speakers, and sometimes individual devices.

But consumers keep buying smart gadgets, with NPD Group suggesting that 15% of homes in the U.S. now have some type of connected device. This is up from 10% a year ago. And capitalizing on security fears are a host of services and devices that purport to track device traffic and stop the bad guys from compromising your systems. They range from services offered by router makers to physical devices and software.

On the router side companies like Eero and Securifi offer services that see how traffic coming from your devices behaves and where it’s heading. The idea is to flag odd behaviors. From the hardware side, companies like Cujo, Bitdefender, F-Secure’s Sense router, and Norton’s Core Secure Wi-Fi router offer network monitoring, firewalls and other elements to try to secure the home. Joining this crowded environment is Netonomy, a small Israeli startup that also hopes to secure the home.

The company is launching with a small round of seed funding and has hopes of raising about $2.5 million in its next round. It offers A software agent that lives on the router, an app for phones and a cloud back end that communicates with the router agent and handles some of the processing required. The idea is that it can do many of the things the other companies provide, but it also does some things the others can’t do, such as deep packet inspection for suspicious traffic.

Netonomy has been working with ISPs to put its software on their routers, which means that consumers could get the benefit of more security by downloading an app recommended by their ISP. Presumably, the ISP could charge a fee for providing the additional security. Another route to market would be to sell to Belkin, Netgear or D-Link which make consumer routers that retail customers buy.

The third option is the most challenging, and yet it’s what many of the smaller companies like Eero, Bitdefender and Cujo have done — go direct to consumer. Netonomy isn’t going to the consumer directly, yet, and frankly I’m not sure it should. While it’s easy to market security to consumers, it’s hard to get them to pay for it and for them to understand what makes one solution better than another.

If Netonomy is really delivering a unique product its best bet is to sell to a more expert class of buyers and let the larger ISPs do the work of educating customers about the need for more security. The downside to that plan is that many people dislike their ISP and don’t want to pay them for additional services. In an ideal world, security would be a problem that more device manufacturers, router makers and ISPs took seriously rather than placing the burden on the consumer, but that isn’t happening.

So in this world, Netonomy at least has a chance to join the fray.