TokenEx Inc., a startup helping companies secure the financial data they process as part of their business operations, today announced that it has raised $100 million in funding from K1 Investment Management.

E-commerce companies collect customers’ payment card details when processing online purchases. Other firms, such as insurers, also collect financial data from customers. Ensuring that this information is stored and processed in a secure manner can be a challenge even for a large enterprise with significant in-house technical expertise.

TokenEx is working to ease the task of securing financial information. The startup provides a cloud service that uses a cybersecurity technique called tokenization to help companies avoid data breaches. 

According to TokenEx, its cloud service can replace the financial information in a company’s systems with algorithmically-generated files called tokens. Those tokens don’t contain any sensitive data such as credit card numbers. The result, the startup says, is increased security. 

If a company replaces the credit card numbers and other sensitive financial information in its systems with tokens, the risk of hacking is mitigated to a significant degree. In the event of a data breach, hackers would gain access only to the tokens and not credit card numbers.

Besides improving cybersecurity, TokenEx says its service also provides a second benefit for organizations: simplified regulatory compliance.

Online retailers and other companies that process payment card information as part of their business operations must comply with a cybersecurity standard called PCI DSS. Meeting the requirements set forth in the standard can be technically challenging. Replacing payment card information kept in a company’s systems with tokens reduces the total amount of financial data that it stores internally, which makes it easier to comply with PCI DSS.

There are cases where a company may need to access a financial record that it replaced with a token using TokenEx’s service. In such scenarios, the company can make a request to TokenEx’s service via an application programming interface and it will fetch the necessary data. 

“With the rise in data breaches, privacy regulations, and digital payment volumes, the need for our solution has increased exponentially,” said TokenEx founder and Chief Executive Officer Alex Pezold. “This round of funding will allow us to take our technology to new heights and create a world-class experience for all our customers.”

TokenEx’s plans for its new $100 million funding round include growing its product, customer service and account management teams. The startup will also expand its global operations.

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