The venture capital firms of Goldman Sachs and Citigroup, along with the fund backed by Google’s chairman, have invested in a vendor that helps banks secure their cloud technology.

Dyadic Security announced Tuesday the completion of a $12 million Series B funding round that was led by Goldman Sachs Principal Strategic Investments; Citi Ventures; and Innovation Endeavors, the early-stage VC fund backed solely by Eric Schmidt, the chairman of Google’s parent company.

Eric Schmidt, executive chairman of Alphabet Inc.
Attention-getter: A fund backed by Eric Schmidt, the chairman of Google's parent company, and two other well-known financial services companies invested in Dyadic Security. Bloomberg News

Dyadic said in a press release that its technology helps companies address the “tremendous security and compliance challenges they face as they make the transition to a cloud-based infrastructure.”

Its virtual hardware security module allows companies to shift from the reliance on smart cards and tokens to a model where cryptographic keys are stored digitally.

"As institutions increasingly shift toward the cloud, and connected devices proliferate with enormous scale and variety, there's a growing need for fully virtual key-protection systems that match the agility and scalability of cloud infrastructure," Arvind Purushotham, managing director and global head of venture investing at Citi Ventures, said in the press release. "Dyadic’s technology caters to the needs of increasingly digital enterprises and matches the security level of traditional systems while being more usable and cost-effective."

Dyadic said it plans to use the additional capital to expand its sales and marketing operations in North America.