Paul Hindo would probably be the first guy to admit he’s no cybersecurity guru, but he didn’t need a PhD in quantum physics to know that the expert he met at a lunch meeting back in 2016 might hold the key to an industry-leading technology.
A serial entrepreneur and well-known Ottawa real estate executive, Hindo had recently invested in a local cyber-defence company and wanted to do more due diligence before pouring additional money into the firm. An industry contact recommended he talk to Tiago de Jesus, a McGill University-educated quantum physicist who was then heading up the National Energy Infrastructure Test Centre at Natural Resources Canada.
Over lunch, de Jesus informed Hindo that the technology of the cybersecurity company in question was “nothing more than smoke and mirrors.” The more that Hindo – the founding chair of Kanata-based life sciences trailblazer DNA Genotek – listened to de Jesus dissect cyber-tech, the more he liked what he heard.
“So I said to him, ‘Look, if you’re that smart, how come you don’t have a company?’” Hindo says, recalling that day six years ago. “He goes, ‘I don’t have money.’ I said, ‘Oh. Money, you don’t have to worry about. We have money. If you have a good idea, we can always commercialize it.’ That’s where the relationship started.”
That blind business date blossomed into a flourishing collaboration. Hindo immediately focused on helping de Jesus build a better mousetrap, as it were, in the cybersecurity space.
After spending about a year getting the technology ready for market, Hindo and de Jesus launched cybersecurity company Cydef in 2017.
Today, the firm has grown to 20 employees and is closing in on 100 customers. Most are small and medium-sized enterprises from an eclectic mix of industries and verticals that includes law firms and other professional service providers, as well as non-profit organizations such as the North Bay Police Service and Saskatoon Public Schools.
“A lot of them have a false sense of security and say, ‘I’m a small business – why would I be a target (for cyber attacks)?’” Hindo explains. “You end up doing a lot of awareness.”
According to Hindo, their message is resonating with a growing number of customers. The global cybersecurity market is massive – estimates peg its current value at anywhere from US$150 billion to more than US$200 billion annually – but Hindo says most of the big players ignore the smaller businesses that are the lifeblood of the Canadian economy in favour of the “big whales.”
Cydef, by contrast, intentionally targets SMEs. While that might not seem like the best path to becoming a billion-dollar unicorn, Cydef’s leadership group believes it’s a strategy that will pay off in the long run.
“Obviously, you get one customer with 50,000 licences or 100,000 licences, that changes the game for an organization like us,” Hindo says. “But being able to sell to a five-, 10-, 25-person organization, that’s the bread and butter of Canadian business. If you can serve those effectively … it does become very interesting.”
Still, even when you’re in an industry whose products have gone from a nice-to-have to a must-have practically overnight, it can be hard to stand out from the pack.
“We’re in a crowded space,” concedes Cydef chief executive Steve Rainville, who joined the firm nearly three years ago after serving in senior consulting and managerial roles at IBM, Deloitte, Rona and CGI.
Still, Rainville and his team of engineers feel like they’ve devised the secret recipe for success in the ultra-competitive field of cybersecurity: proprietary software that uses machine learning to determine what’s considered “normal” activity on a variety of applications, from Excel to Zoom.
Once that baseline of non-threatening software behaviour has been established, Cydef’s tech can bypass data it already knows isn’t harmful and zero in on identifying anomalies and neutralizing potential threats – saving time and money for clients.
Because the basic structure of most software applications is the same no matter who’s using them, Rainville explains, the same approach can be applied to all customers no matter what business they’re in or what they use the applications for.
“I can apply the same logic, the same reasoning, to all of the apps in all of my customers,” he says.
Cydef provides a dashboard that shows its clients exactly what’s going on with all their applications in real time, flagging potential threats and categorizing them so companies can determine whether a threat needs to be addressed immediately – a widespread malware attack, for example – or whether it’s more innocent, such as an employee inadvertently downloading a virus along with a pirated video game.
The Ottawa company is now monitoring more than 10,000 separate devices across the country. Cydef lets customers try its software for free for a month and Hindo says it usually doesn’t take long for those trial runs to prove the system is worth the price of a paid subscription.
“In 90 per cent of cases, we find something within the hour that’s been lurking in (customers’) stuff,” he says.
Hindo says the firm is on pace to crack the $1-million mark in annual recurring revenues in 2022 and is on a trajectory to generate triple that amount next year as it continues to expand its global footprint. Cydef recently signed deals with distributors in Africa and the Phillipines and is gaining traction in other international markets such as the United Arab Emirates, he adds.
“Sometimes Canadian companies have to go outside the country to prove themselves before they come back and say, ‘We’re good,’” Hindo notes with a smile. “We really feel there’s going to be a huge opportunity for us over there.”
Up until now, the former vice-president of real estate brokerage Cushman & Wakefield’s Ottawa office has funded the venture mostly out of his own pocket, with help from friends and family as well as a few well-heeled angel investors. Hindo says another “strategic investor” will soon be topping up Cydef’s coffers as the company pushes closer to its target of being cash-flow positive by the end of next year.
“We will grow exponentially – I have no doubt,” Hindo says. “I hope that we can build (Cydef) into an institution that will become one of the biggest names in Ottawa, just like a Shopify. Who knows?”
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