Cyber security software startup Cydarm Technologies has secured $500,000 in funding, and while founder Dr Vaughan Shanks has always had an entrepreneurial streak, it’s only now the stars have aligned to bring that passion together with a lifetime of tech experience.
The funding round was led by Right Click Capital, and also includes private investors who have not been named.
Founded in 2017, Cydarm was one of the first graduates of CyRise, Melbourne’s cyber security startup accelerator.
However, Shanks has plenty of experience in the field, having worked at the Australian Department of Defence, and in Silicon Valley data analytics firm Palantir.
“My government background gave me a real appreciation of the sort of processes you need to operate across a distributed system,” he says.
Cydarm is a case management system, allowing organisations to respond efficiently and effectively in the event of a cyber attack.
Companies are under a lot of pressure when it comes to cyber security, Shanks says, both to prevent an incident and to explain what has happened when there is one.
“Senior leaders want to know their security team is on point,” Shanks says.
Cydarm is intended to “automate a lot of the manual drudge work that goes into internet response … relieving smart people from doing dumb things repetitively”.
The software also allows security teams to communicate more easily, both with other departments within their organisation and with other companies.
“Cyber security is a team sport,” Shanks says.
In the same way that if a shopkeeper knows there’s a shoplifter in the area, he will warn other business owners in the area.
“There’s an inevitability about cyber crime in the same way that burglary is inevitable.”
A global plan
Although Shanks’s experience is in technology, he says he’s always felt the pull of the startup life.
“I always knew I wanted to run my own company eventually,” he says.
“There’s something hardwired into me,” he adds.
However, going through the fundraising process was a challenge, “especially for an early-stage business”, he says.
“You have got to show that you have a credible plan, and a global plan.”
Shanks has been in discussions with Right Click Capital for about three months, and views the funding as something of a validation.
“They’re very experienced VCs, so it’s great to have someone endorse my idea in that way,” he says.
The funds will be used to accelerate the market validation of the product, and “really work towards product-market fit”, Shanks says.
He will be building a team of “technical folks and software developers”, he says, in a bid to build the best customer experience possible and to start distributing to the local market.
Over the next six months, the team will also look at which sectors of the market are likely to benefit from the product the most, as well as “which features are the most useful, and which we can park for later”.
In nine to 12 months, Shanks says he will start considering taking the solution overseas.
Cyber security is not a huge industry, he says, and any cyber security startup “has to think globally to reach scale”.
Because the product is software-based, a lot of the work can be done remotely, he adds, and while he expects to wait a while before making the next move, “if an opportunity came up tomorrow, I would seriously consider it”, he says.
When it comes to advice for other startup founders, Shanks is modest, reluctant to put too much stock in his own experience.
However, he does suggest founders work on building real relationships with investors, and make sure to talk with them often.
“Be authentic, have genuine conversations, don’t make everything a pitch,” he says.
He also warns against being too greedy in what you ask for, considering instead how much money you need to achieve the next stage of your business.
“Put yourself in the VC’s shoes, and think about how you’re going to make them a return on investment,” he advises.
At the same time, he says it can be important to understand what the investors’ expectations are, including the level of involvement they want to have and the benefits they can bring to the startup.
Having some input into the business side of things was important for Shanks.
While running a business was “an itch I’ve been wanting to scratch”, he accepts he’s pretty new to entrepreneurship.
“You need to surround yourself with people who have done this before,” he says.