Cybersecurity firm Protexxa has closed a $7.2 million (CA$10 million) Series A, led by a family office, for its AI-powered tech that helps companies address cybersecurity concerns by identifying issues and offering solutions.
The Canada-based company was founded by former cybersecurity executive Claudette McGowan in 2021. Using its artificial intelligence-powered platform, Protexxa can, for example, help find exposed passwords, issue response plans for cyberattacks, and offer a “cyber health” score so companies are always aware of its security health.
Speaking to TechCrunch, McGowan said she founded the company due to the rapid rise in cyberattacks these past years, and, with that, the increased fears people have about cybersecurity. TechCrunch has reported that already, data breaches in the U.S. alone have caused more than 1 billion in stolen records. Cyberattacks are also costly — and are expected to cost trillions of dollars in the upcoming years.
“People aren’t prepared for the reality of this risk, plus AI is helping attackers to scale, every device is connected, and there’s a shortage in cybersecurity talent to help reduce these risks,” McGowan said.
The biggest types of attacks becoming more prevalent include ransomware, supply chain attacks, attacks on critical infrastructure, phishing, and business email compromise — where attackers come between two communication parties to steal data. She said despite what is seen in movies, most cyberattacks happen in boring ways, like clicking an email link or validating information on a phone call.
“Using simple passwords, not using MFA [multi-factor authentication], ignoring privacy settings or over-sharing are all ways humans play a role in making it too easy for cybercriminals,” she continued. “Cybercriminals are using AI to scale attacks such as phishing emails and injecting malware. We are also seeing impersonations through deepfake images and videos.”
McGowan said that her platform uses AI to quickly find and remove such images, while also providing analysis on how certain online behavior might contribute to future attacks. She described her fundraise process as “formidable” and said she started fundraising at the end of 2023, closing the round last month. She said it’s true that fundraising is challenging for most founders now, but Protexxa was able to fill much of its round with investments from those who backed its original $3.6 million (CA$5 million) seed round in 2021.
Even her lead investor was one of the company’s most “engaged” seed investors, she said.
Bell Ventures, the CVC of the communication company Bell Canada; Sandpiper Ventures; BKR Capital; and Export Development Canada also participated in the round. The company has raised $10 million (CA$15 million) to date.
“People are at the core of any company’s success but it is also through people that hackers find their way into corporations. We invested in Protexxa because it is not a Band-Aid solution,” Lise Birikundavyi, managing partner at BKR, told TechCrunch. “The main product, Defender, focuses on the root cause of any company’s vulnerability — the cyber hygiene of employees — and delivers solutions that support individuals and protect employers. This mission and the team at Protexxa are extremely impressive, and we are glad to be part of their journey.”
In a sense, McGowan was probably always going to find herself here. She says she’s been in technology her whole career, almost 30 years, working in everything from hospitals to banks and even policing. She started as a technology manager at Deloitte before working her way up BMO Financial Group, becoming its chief information officer. She then went on to work as a global cybersecurity executive at TD Bank, all while running her own organization, The Firehood, to give opportunities to women in technology. She then left TD Bank to do her own thing.
Within all this, information security has always played an integral role, she said.
“In one of my last roles, I was accountable for over 200,000 devices, laptops, servers, smartphones, printers, and they all needed to be connected and protected,” she continued.
Her parents were also entrepreneurs so, she said, she grew up always understanding the benefits of creating one’s own path. She’s written children’s books and has hosted local tech expositions. “It finally came to a point where I felt I could make a bigger impact if I dedicated myself to entrepreneurship,” she said. “And Protexxa was born.”
McGowan said the fresh capital will be used to expand the sales and marketing team to hopefully expand the company into global markets. It will also be used to help increase engineering and data science innovation. The company has already started its U.S. expansion.
“I’m enjoying every minute of trying to drive impact and demystify cybersecurity,” she said, adding that the company believes the “game-changer” is empowering people with the knowledge and tools they need so they feel protected. “So many leaders are fearful or even worse, they feel defeated by the mounting cyber risks. But it is so rewarding when we see the change in mindset and action with our customers.”
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