Australian cybersecurity startups are “a lot more mature” this year and many are ready to go to market as they push for support under the auspices of cybersecurity incubator Cyrise, the firm’s head has noted as the firm counts down the last days for applications to its second round of funding.
Many of the companies this year are applying with products developed, teams working in concert and some early customers that make them ready to hit the ground running, CEO Scott Handsaker told CSO Australia.
This reflected both maturity on the part of the companies, and a better understanding of Cyrise’s value as the firm’s first anniversary ticks over.
“We’ve had 12 to 18 months and people are starting to realise that cybersecurity is a real opportunity,” Handsaker explained. “And we have built up a real reputation, with brand and credibility.”
Funded by LaunchVic last year, Cyrise grew out of a partnership between Deakin University and Dimension Data, and runs six-month mentorship programs designed to help early-stage cybersecurity startups develop their product or service.
Cyrise links entrepreneurs with subject-matter experts, early-stage customers willing to offer their networks as proving grounds for new technologies, and investors who have an interest in helping cybersecurity startups get off the ground.
“Capital raising is still challenging for cybersecurity startups in Australia,” Handsaker said. “There is definitely money out there and if you’re a good startup you can absolutely raise it – but there is a shortage of VCs in Australia who really understand cybersecurity, which makes it a bit more challenging.”
Combining access to expertise, investors, and potential customers had proven helpful for the first cohort of Cyrise firms, he said.
“Three of our founders came into the program at the idea stage, and all four are out of the program and building their businesses,” Handsaker said. “They got enormous value out of the program.”
Last year, four companies were chosen to receive support including $50,000 as part of a capped SAFE (Simple Agreement for Future Equity) agreement.
This year’s cohort – applications for which will close on 16 September – will see six companies funded, as well as office space in Melbourne and trips to Israel and the USA.
The mentorships available within the program, Handsaker said, help differentiate it from other cybersecurity incubators.
“Mentors can connect you with the right people at the right time, and the cohort effect is incredibly important,” he explained.
“We want the best people we can find because those people are tremendously impactful on your experience and what you get it out of it. These are things that [cybersecurity entrepreneurs] can’t get on their own and can’t develop otherwise.”
Cyrise’s program is one of many in an Australian market that has steadily become more enamoured with the commercial possibilities that cybersecurity startups provide. Industry development group AustCyber’s speed-networking events, for example, have been oversold.
Yet government investments often focus on specific skills development: for example, Elbit Systems this month was chosen to deliver its Cyber Range cybersecurity training environment to train 50 Australian Defence Force (ADF) specialist ‘cyber warriors’ at a time, while UNSW Canberra Cyber recently opened its own cyber training facilities.
Private-sector initiatives offer more focused and effective pathways for helping early-stage companies develop their opportunities: “If you’re looking to the government for innovation, you’ve got a problem,” Handsaker said.
“Startups need to be focused on validating their business, solving a problem, and building something that’s world-class.”