Cyber London (CyLon), Europe’s first dedicated cyber security startup accelerator and incubator, has just announced the start of its second programme and managed to find the week when news from the Office for National Statistics showed there were an estimated 5.1 million incidents of fraud, with 3.8 million adult victims in England and Wales in the past 12 months.
Alex van Someren, one of the founders of CyLon and also Managing Partner of the Early Stage Funds at Amadeus, one of the backers of the group, explains that the first cohort of CyLon teams were a diverse mix, with folks working in detecting when attacks are being carried out against networks but also offering a service to check the security of networks.
The new data analytics firms who are looking at streams of data and trying to work out which data falls in normal bounds and which doesn’t are increasingly using automated machinery, an engine rather than people, and systems based on the quantitative algorithms and pattern recognition software familiar in the investment departments of the financial industry.
It is no coincidence that CyLon is hosted at Winton Capital Management. “Security and payment systems and financial services technology overlap and so one of the reasons we are hosted at Winton is because David Harding felt strongly that the kind of activities we are doing was useful for them but important from an innovation point of view as well,” van Someren says.
He describes cybersecurity and fintech as cousins or even siblings in the new world of on-line fraud, and was surprised by the attention he received at a recent family office conference at which he made a presentation. “It’s taken increasingly seriously,” he says.
“Some firms are good at protecting themselves from cyber threat, some not. Principally I talked about how to think about the challenges of establishing adequate cybersecurity. It’s all about the people. You need to train and establish good procedures because the kind of e-mail to your organisation will bypass most forms of electronic protection – it’s the user who needs to recognise its danger.”
He finds that most people don’t have much trouble recognising dodgy e-mails. “Those are deliberately clunky because what they need is stupid people to click on them and reply. The point is that intelligent people aren’t going to open them.”
Basic cybersecurity starts with automated defences such as basic free firewalls while more sophisticated e-mail scanners which scan both in and outgoing mail are the next step up. “It’s a very fragmented market and difficult to look at the whole opportunity space so that’s what IT security professionals are needed for,” he says.
CyLon is run on a sponsorship model raising money from brand names to fund the programme. The new primary sponsor for this round of the programme is British Aerospace, through its Applied Intelligence division. “They put up the money in large part and we give a small grant to teams that come in of £15,000 and that enables us to be economically separated from the customers or longer term investors in the programme.”
Once the companies have gone through the process, CyLon tries to introduce them to potential customers and investors. “We get them from idea state to viable products” he says.
Their big success with the first round of the programme was Sphere Secure which subsequently got picked up by a Silicone valley funder and pushed on further through the development process. Their product provides a secure environment to use Apps on mobile phones. Effectively it wraps the App and restricts the flow of personal information. It is particularly useful for the increasingly mobile office worker, who might be using confidential office documents on their phones, van Someren says.
The ultimate aim of CyLon is to recognise that the UK has great innovation in cybersecurity is not effective in helping new businesses get started. “Our aim is to ensure that the UK gets the respect it deserves as a place that is capable of creating new type of innovations,” he says.