Cybersecurity company Protexxa has closed a $7.2 million ($10 million CAD) Series A funding round, led by a family office, for its AI-powered technology that helps businesses address cybersecurity concerns by identifying problems and providing solutions.
The Canadian company was founded by former cybersecurity executive Claudette McGowan in 2021. Using its AI-powered platform, Protexxa can, for example, help find exposed passwords, generate cyberattack response plans, and provide a “cyber health” score so companies are always aware of their security health.
Speaking to TechCrunch, McGowan said she founded the company because cyberattacks have been on the rise in recent years, but people’s concerns about cybersecurity have also increased. TechCrunch reports that data breaches in the US alone have already resulted in more than a billion records being stolen. Cyberattacks are also expensive — and their costs are expected to rise. cost trillions of dollars in the next years.
“People are not prepared for the reality of this risk, plus AI is helping attackers scale, every device is connected, and there is a shortage of cybersecurity talent to help mitigate these risks,” McGowan said.
The most common types of attacks include ransomware, supply chain attacks, attacks on critical infrastructure, phishing, and business email compromise — where attackers get in between two ends of a communication to steal data. Despite what we see in the movies, most cyberattacks happen in mundane ways, like clicking on an email link or verifying information on a phone call, she said.
“Use simple passwords, and do not use two-factor authentication.” [multi-factor authentication]“Ignoring privacy settings or oversharing are all ways humans play a role in making it easier for cybercriminals,” she continued. “Cybercriminals are using AI to extend attacks like phishing emails and malware injections. We’re also seeing impersonations through fake photos and videos.”
McGowan said her platform uses artificial intelligence to quickly find and remove such images, while providing analysis on how certain online behavior might contribute to future attacks. She described the fundraising process as “enormous,” saying she began raising money in late 2023 and closed the round last month. While it’s true that raising money is a challenge for most founders right now, she said Protexxa was able to fill a large portion of its round with investments from those who backed its $3.6 million ($5 million CAD) seed round in 2021.
She said her company’s lead investor was also one of the company’s most “engaged” investors.
Bell Ventures, a venture capital firm of Bell Canada, Sandpiper Ventures, BKR Capital, and Export Development Canada also participated in the round. The company has raised $10 million (C$15 million) to date.
“People are at the heart of any company’s success, but it’s also through people that hackers find their way into companies. We invested in Protexxa because it’s not a temporary solution,” Liz Perikundavi, managing partner at BKR, told TechCrunch. “Their flagship product, Defender, focuses on the root cause of any company’s vulnerability — employee cyber hygiene — and delivers solutions that support individuals and protect employers. This mission and the team at Protexxa are incredibly impressive, and we’re excited to be a part of their journey.”
In a sense, McGowan might have always found herself here. She says she’s been in tech her entire career, nearly 30 years, working in everything from hospitals to banks to the police. She started as a technology director at Deloitte before working her way up to BMO Financial Group, where she became chief information officer. She then worked as global cybersecurity director at TD Bank, all while running her own organization, The FireHood, to give women in tech opportunities. Then she left TD Bank to do her own thing.
She added that information security has always played a fundamental role in all of this.
“In one of my last roles, I was responsible for over 200,000 devices, laptops, servers, smartphones, printers, and it was imperative to keep them all connected and protected,” she continued.
Her parents were also entrepreneurs, so she said she grew up always aware of the benefits of creating her own path. She wrote children’s books and hosted local tech fairs. “I finally got to a point where I felt like I could make a bigger impact if I dedicated myself to entrepreneurship,” she said. “That’s how Protexa was born.”
The new capital will be used to expand the sales and marketing team in hopes of expanding the company into global markets, McGowan said. It will also be used to help drive innovation in engineering and data science. The company has already begun its expansion in the United States.
“I enjoy every minute of trying to make an impact and demystify cybersecurity,” she said, adding that the company believes the “critical factor” is empowering people with the knowledge and tools they need to feel protected. “Too many leaders are scared or worse, feel defeated by the growing cyber risks. But it’s incredibly rewarding to see the mindset change and work with our customers.”