Knox Systems Raises $25M Series A to Scale Largest AI-Managed Cloud to Deliver 90-Day FedRAMP at 90% Lower Cost

Funding Led by B Capital, with participation from M12, Microsoft's Venture Fund, Okta Ventures, MongoDB Ventures, Hearst Ventures, and previous Investors Felicis, Firsthand and Ridgeline

NEW YORK and WASHINGTON, March 17, 2026 /PRNewswire/ -- Knox Systems ("Knox"), the largest federal AI-managed cloud provider, today announced it has raised $25 million in Series A funding led by B Capital, alongside M12, Microsoft's Venture Fund, Okta Ventures, MongoDB Ventures, Hearst Ventures and Benchstrength. This announcement comes just nine months after the company's June 2025 $6.5M seed round led by Felicis, alongside Ridgeline and FirsthandVC. This funding will fuel Knox's next phase of growth, enabling the company to accelerate FedRAMP authorization – the U.S. Government's unified, rigorous security standard for cloud services – for its customers in an unprecedented 90 days for 90% less cost, while also positioning Knox as the go‑to platform trusted to run production environments for the most recognizable commercial brands on the planet.

This funding comes at a major inflection point. Traditional FedRAMP often costs $2-5 million up front with annual costs exceeding $1 million. Knox's pre-authorized environment reduces first-year costs by 90% and significantly lowers ongoing expenses, making federal entry realistic for the majority of Enterprise SaaS. The U.S. Government spends $100 billion per year on software, but fewer than 500 SaaS applications are available for the U.S. Government, out of over 30,000 that are commercially available. Knox's mission is to give SaaS vendors the fastest, most cost‑effective path to FedRAMP authorization, accelerating government agencies' accessibility to secure, modern software essential for mission success.

"This raise not only allows us to expand federal authorization capacity at a moment when agencies urgently need access to modern, secure technology, but is a natural extension for commercial adoption," said Knox CEO Irina Denisenko. "This investment enables Knox to deliver a faster, lower‑cost path for SaaS vendors to meet federal security requirements and reach government customers in a matter of weeks, not years. Knox has established itself as the government‑grade security model that commercial organizations can rely on for their most critical production environments. A platform built to operate in demanding government conditions delivers a level of trust that translates directly to commercial needs."

"Knox is enabling a long-overdue transformation in how SaaS companies access the federal market," said Howard Morgan, Chair and General Partner of B Capital. "By developing a meaningful alternative to the legacy FedRAMP process, Knox provides a win-win solution for federal agencies and potential contractors alike: vendors can unlock new federal revenue in a matter of months at a fraction of the cost, while agencies across defense and civilian missions gain faster access to the secure, mission‑critical technologies they require. We are proud to lead this investment in Knox at such a critical inflection point for federal technology adoption."

Many SaaS companies are forced to treat compliance like a checkbox riddled with complexity. Knox is focused on offering government agencies speed without sacrificing an ounce of capability or security. The company operates on the fundamental belief that the government, at every level, should have immediate, secure access to world class software. Knox is closing the gap between industry innovation and government software adoption, ensuring agencies and military operators get software at the speed and quality the mission demands.

"Knox Systems addresses a clear need in the defense ecosystem: reducing the time and cost required to get secure cloud solutions into production," said Leigh Madden, Vice President, National Security, Microsoft. "Their platform helps programs meet compliance requirements faster and deploy modern tools more reliably. Microsoft is backing Knox because their growth strengthens the broader ecosystem our DoW customers rely on."

"We spent years working toward FedRAMP authorization, but various timelines and processes were moving slower than our customers' needs," said Aubrey Vaughn, VP of Strategy & Business Development, Public Sector at Celonis. "By partnering with Knox, we achieved authorization in less than 90 days. This allows us to get our technology into the hands of government leaders immediately, giving them the insights they need when they matter most. Knox has simplified our compliance path and removed the traditional obstacles that usually slow down public sector innovation."

As one of only two major operators in this category, with Palantir being the other, Knox runs the largest multi‑cloud federal boundary across AWS, Azure, and Google Cloud, enabling unmatched flexibility through a bring‑your‑own‑architecture model. The company currently holds Authorizations to Operate (ATOs) across 15 federal civilian and defense agencies, including the Department of Health and Human Services, Department of Homeland Security, Department of Commerce, the Food and Drug Administration, and others.

About Knox Systems
Knox Systems operates the largest managed federal cloud, trusted by top agencies and partners across defense and civilian sectors. Built for speed, resilience, and compliance, Knox delivers FedRAMP authorization in 90 days - turning the biggest bottleneck in government IT into the fastest path to modernization. Knox proudly serves Adobe, Celonis, OutSystems, Armis, BigID and more AI and SaaS providers, accelerating secure innovation across the federal landscape. Learn more at www.knoxsystems.com.

SOURCE Knox Systems, Inc