Dam Secure, an AI security startup, has secured $4 million in seed funding led by Paladin Capital Group to develop an AI-native platform that addresses security risks from AI-generated code entering production at enterprise scale. Founded by Patrick Collins and Simon Harloff, the company focuses on proactive management of vulnerabilities introduced by generative AI coding tools, helping organizations enforce custom security policies across large codebases.
Enterprises are rapidly adopting AI coding assistants to boost developer productivity, but this surge in software volume is overwhelming legacy application security processes. Traditional tools generate excessive noise and struggle to detect novel issues unique to AI outputs.
“Enterprises are rushing to adopt AI to increase developer velocity, but the volume of software being produced is overwhelming traditional application security processes,” said Collins. “Existing security tools generate too much noise to work effectively in this new environment."
AI systems can produce functional code that still fails critical security standards. Industry research highlights that large language models frequently introduce vulnerabilities—particularly logic flaws—in up to half of generated outputs unless explicitly constrained.
“Industry research shows that, when not explicitly constrained, large language models introduce vulnerabilities in up to half of generated code. This creates dangerous ‘logic gaps’ that organizations are largely blind to. We are already seeing the cost of this in recent billion-dollar heists and widespread ecosystem attacks. These breaches don’t rely on classic bugs, they exploit valid but flawed logic that existing ‘scan-and-patch’ tools simply cannot see,” continues Collins.
These gaps enable sophisticated attacks that bypass conventional detection methods, increasing exposure as AI adoption scales.
Dam Secure's platform introduces an engine that translates plain-English security requirements—such as “customer data must be encrypted at rest”—into enforceable rules applied automatically across codebases. This shifts security from reactive scanning to proactive, policy-driven enforcement integrated into the development workflow.
“The current approach to application security is struggling to keep pace with generative AI,” said Mourad Yesayan, Managing Director at Paladin Capital Group. “Developers are becoming increasingly reliant on AI-generated code, and Dam Secure is focused on putting guardrails around that workflow.”
The founding team brings deep expertise in security product development. Patrick Collins previously held executive roles at Zip Payments and Secure Code Warrior, and founded and exited mobile technology company 5th Finger. Simon Harloff led product security at Zip Payments and Secure Code Warrior, and oversees Dam Secure’s technical architecture.
With strong early interest from customers across verticals, the new funding will support accelerated product enhancements and broader market expansion throughout 2026.
About Paladin Capital Group
Paladin Capital Group was founded in 2001 and has offices in Washington DC, New York, London, Luxembourg, and Silicon Valley. As a multi-stage investor, Paladin’s core strength is identifying, supporting and investing in innovative companies that develop promising, early-stage technologies to address the critical cyber and advanced technological needs of both commercial and government customers. Combining proven investment experience with deep expertise in global security, cyber technology and cutting-edge research, Paladin has invested in more than 85 companies since 2008 and has been a trusted partner to investors, entrepreneurs and governments for over two decades.
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