July 2017

Callsign raises $35M Series A led by Allegis Capital and Accel as it expands internationally

  |   Allegis News, Portfolio News, Series A, The Latest
  • Investment used to roll-out Callsign’s authentication platform to enterprises, financial institutions and consumer-facing digital services and to ramp-up hiring

 

  • Seasoned cybersecurity executive and Allegis Venture Partner David DeWalt joins the board as Vice Chairman along with Bob Ackerman Founder of Allegis Capital

 

San Francisco/London, July 27th, 2017: Callsign, the leading artificial intelligence-based authentication platform, has raised a $35 million Series A investment led by premier, early stage cyber security investor Allegis Capital and global venture capital firm Accel. Early-stage investor PTB Ventures and cybersecurity industry veteran David DeWalt’s NightDragon Security also participated in the round.

 

With the proliferation of data breaches, advanced threats resulting in stolen user credentials, there is increasing pressure on companies of all sizes around the world to implement better authentication practices. In 2015 alone, cybercrime cost businesses $500 billion, and this is estimated to rise four times to $2 trillion in 2019[1]. At the same time, companies want to minimize the friction that universal two-factor authentication introduces to the user experience.

 

In response, Callsign developed a deep learning-based authentication platform called Intelligence Driven Authentication™ (IDA). It enables enterprises to select the most secure and least invasive authentication journey for each user in real-time, based on his or her risk profile and tendencies – in other words, it adapts the type of authentication to the situation virtually eliminating advanced threats such as spear phishing. The result is an experience that optimises for both security and usability – a win-win for the enterprise and the end user.

 

Callsign’s IDA platform uniquely derives the complete intelligence picture around authentication and authorisation events, giving enterprises the ability to set adaptive policies that pinpoint suspicious usage. While Callsign can be can be deployed with out-of-the box mobile authenticators, it is a very open and flexible platform to which enterprises can easily plug-in existing authenticators or data sources. Callsign has also integrated with several Identity and Access Management providers, like ForgeRock, to provide a truly end-to-end solution.

 

Callsign was founded in 2012. Its clients are enterprises, financial institutions and consumer-facing digital services and include some of the world’s largest banks, such as Lloyds Bank and Deutsche Bank. It’s being deployed to hundreds of thousands of users globally.

 

Zia Hayat, Founder & CEO of Callsign, said: “Several years ago, I realized that the way we identify ourselves online was very broken. I knew we needed to make existing solutions like multi-factor authentication and fraud analytics better by bringing them together. Our IDA platform has had an incredible reception from financial institutions, governments and other large enterprises, and this investment will allow us to grow the business and meet some of the strong demand we’re seeing.”

 

DeWalt, a Venture Partner with Allegis Capital and formerly President and CEO of McAfee and CEO and Executive Chairman of FireEye, will join the board of directors as Vice Chairman. DeWalt brings more than 25 years of experience in the cybersecurity sector, and is widely recognized as one of the industry’s most successful executives. He currently holds a number of board positions at leading cybersecurity companies, including Vice Chairman of ForgeRock and Vice Chairman of ForeScout Technologies, among others.

 

DeWalt said: “Zia and his exceptional product and engineering team have built the foundations of a very solid business. They are pioneering a new approach to authentication with a powerful product that is quickly attracting some of the world’s leading businesses as customers. As the company rolls out its solution, it’s an exciting time to be joining the board.”

 

The new investment will help accelerate the growth of the company. Callsign will be expanding globally from its headquarters in London, with a particular focus on the US and Far East, and is planning to open offices in both the Bay Area and New York City in the next few months. Callsign will be building out its engineering and commercial teams as well, including sales, marketing and business development roles.

 

Bob Ackerman, Allegis founder and Managing Director will also be joining the Board.  Ackerman said, “authentication of identities has become a core pillar in enterprise cyber security. Callsign’s IDA represents a breakthrough in meeting levels of identify assurance that are essential to enterprise operations without compromising the effectiveness and efficiency of digital business platforms. Callsign is leading the industry in delivering identify assurance without compromise,” Ackerman added.

 

Harry Nelis of Accel and Dave Fields from PTB Ventures are also joining the Callsign board of directors.

 

About Callsign Inc.

Callsign is the leading artificial intelligence-based authentication platform for enterprises, financial institutions and consumer-facing digital services. Its unique Intelligence Driven Authentication™ (IDA) solution enables more informed and truly adaptive access control decisions, putting enterprises and their users back in control. This creates frictionless access for users, whilst reducing false rejection rates and increasing security as well as operational agility.

 

Callsign serves Tier 1 banking clients, government bodies and enterprises throughout Europe and the US. Their IDA technology puts enterprises and users back in complete control. For additional information please visit callsign.com

 

About Allegis Capital

Allegis Capital is a premier, early-stage venture firm that invests solely in cybersecurity and was the first venture fund to focus strictly on cyber. In addition to Callsign, current investments include Area 1, Bracket Computing, Cyber GRX, E8 Security, RedOwl, Shape Security, Signifyd, Synack, tCell.io and vArmour. Allegis is also a founding partner in cyber Start-Up Studio, DataTribe, based in Columbia, Maryland. Allegis Capital is based in San Francisco Ca.

 

 

About Accel

Accel is a leading venture capital firm that invests in people and their companies from the earliest days through all phases of private company growth. Atlassian, BlaBlaCar, Cloudera, Crowdstrike, Deliveroo, DJI, Dropbox, Etsy, Facebook, Flipkart, Forescout, ForgeRock, Funding Circle, Kayak, QlikTech, Slack, Spotify, Supercell and WorldRemit are among the companies the firm has backed over the past 30 years. The firm seeks to understand entrepreneurs as individuals, appreciate their originality and play to their strengths. Because greatness doesn’t have a stereotype. For more, visit www.accel.com, www.facebook.com/accel or www.twitter.com/accel.

 

About PTB

PTB Ventures is a thesis-driven venture capital firm investing in early-stage companies in the emerging digital identity ecosystem. Digital identity is the cornerstone of a transformation that will see trillions of networked devices connected to billions of humans. This transformation will create unprecedented economic expansion and a new level of security and access to billions of people. PTB is headquartered in New York City.

 

 

[1] https://www.juniperresearch.com/press/press-releases/cybercrime-cost-businesses-over-2trillion

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Why the Hub of U.S. Cybersecurity – the D.C. Beltway – Produces So Few Commercial Cyber Startups

  |   Allegis News, The Latest

 

 

 

 

By Robert R. Ackerman Jr. and Mike Janke

 

FULTON, Md. — The Washington D.C. Beltway is a beehive of cybersecurity activity. In Maryland alone, Fort Meade houses the U.S. Cyber Command, the National Security Agency and the Defense Information Systems Agency.

 

Fort Meade’s approximately 60,000 employees – more than double the number of workers at The Pentagon – and other bastions of local cyber activity, such as the CIA, reflects the federal government’s huge cybersecurity presence here. It also mirrors decades of collaboration between government labs and the University of Maryland and other local universities in the business of training cyber engineers.

It should be no surprise, then, that the population of cyber engineers and analysts throughout the Washington Beltway is 3 ½ times as big as the rest of the U.S. combined.

What is uncanny, however, is the inability of the region to produce a respectable supply of product-oriented cybersecurity startups. Don’t get us wrong. There are plenty of cyber startups in these parts, but they are myopically wedded to the local economy. Fundamentally, they look askance at the cybersecurity world in general. This means significant economic potential lies fallow.

According to a recent study by American University’s Kogod School of Business and Amplifier Advisors, there are a hefty 858 cybersecurity-related firms in metropolitan Washington. But a mere 5.7% of these companies, or 48, actually offer products in the marketplace. Instead, the vast majority are services companies focused on offering services and related expertise to government customers – in many cases, in fact, the same customers that helped them develop their cyber expertise.

This conundrum boils down to this. While the alumni of tech giants such as Google and Facebook leverage their know-how and move on to build high-growth global product-oriented companies, the alumni of world-class institutions, such as the NSA and CIA, move on merely to launch local, slow-growth services businesses.

This local services orientation has two unfortunate by-products: 1) It severely limits access to commercial sectors, and 2) it precludes the growth of a robust and sustainable community of cyber innovation – a highly focused, mini Silicon Valley, if you will. Such a community requires a product orientation.

The disconnect between the enormous expertise in The Beltway and the almost single-minded focus on the services sector is reflected in the amount of venture capital funding in the metropolitan Washington area.

According to an analysis of Q2 2017 venture capital investment activity by the PwC- CB Insights

Money Tree Report, metropolitan Washington garnered 40 venture deals valued at a total of $370 million. By contrast, Silicon Valley and San Francisco garnered 342 deals valued at more than $7.7 billion.

Moreover, the pace of funding in San Francisco and Silicon Valley is rising while it is falling in metropolitan Washington. The funding level in San Francisco was the highest since 4Q 2016 and in Silicon Valley the highest in two years. The VC funding level in metropolitan Washington, meanwhile, plummeted to a two-year low.

What is happening is stunningly clear. Venture capitalists – the financiers of technical innovation – are focused on product companies. These reside overwhelmingly in Silicon Valley and environs. If a cyber entrepreneur is running a services company, he is basically off VC radar.

The Beltway cyber community has its stars, such as the cybersecurity hubs of defense giants Boeing and General Dynamics and a few heralded startups. But it’s not nearly enough. Elite cyber alumni of the U.S. intelligence community default to building service companies because that is what they know — and what exists — in the Washington area.

Then, too, the local entrepreneurial path from public servant to services contractor is well-known and understood.  The D.C. area is optimized to facilitate this pathway in terms of government contracting mechanisms, business financing opportunities, legal support, and technical recruiting efforts.

Getting too comfortable, however, is just plain unwise. The Beltway needs to step up to the plate, broaden its ambitions and truly embrace the deep reservoir of cyber engineering expertise in the D.C. area – a magnet of untapped wealth.

Early to rise to the challenge, Mike and I and others have formed Fulton-based DataTribe, a holding company that partners with D.C.-area entrepreneurial engineers with deep cyber expertise. Yes, they lack the commercial DNA essential to commercialize market growth. This is where DataTribe enters the picture.  It is a startup “studio” currently housing three cyber startups and filling the commercial expertise hole by bringing to the party Silicon Valley expertise, human capital, customer relationships and investment capital. DataTribe and its entrepreneurs form partnerships with engineering entrepreneurs to co-found startup companies.

DataTribe selects and intensely coaches seed-stage startups and provides seed financing of up to $1.5 million. It will kick in additional funding for each company as a member of their Series A investment syndicate. Two DataTribe-based startups – Dragos and Enveil – are already poised to attract formal venture capital in coming months. Dragos is an industrial control systems security firm. Enveil is developing a next-generation version of homographic encryption, which allows enterprises to process data while it remains encrypted, substantially improving security.

DataTribe represents a good start in getting Washington area-based startups on the map, but it is just that – a start. Much more remains to be done. It is product companies, not services companies, that move the economic needle. And if more Beltway cyber entrepreneurs “productize” cybersecurity technology, Americans ultimately will benefit. Beltway cyber technologists simply need to be catalyzed into action.

Robert Ackerman Jr. is a co- founder of DataTribe and founder of Allegis Capital, an early-stage Silicon-based cybersecurity venture capital firm.

Mike janke is also a co-founder of DataTribe and the founder and current chairman of silent circle as well as the co-founder of Blackphone and Blue Pacific Studios, along with Shopify co-founder Daniel Weinand.

 

 

 

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