Ara Labs Security Solutions, whose cloud-based software detects and battles malware in real time, has raised $500,000 in seed financing, part of which will pay for a full-time CEO.
New Brunswick Innovation Foundation and Moncton-based Technology Venture Corp have each invested $250,000 in the Fredericton startup, which is the result of four years of research at the Computer Science faculty at the University of New Brunswick.
The company is now headed by Ali Ghorbani, the Dean of Computer Science at the Fredericton institution. But he intends to continue to focus on his academic position, so the company is looking for a full-time CEO to lead the development of the business.
Ara’s software-as-a-service product detects, reports and mediates malware and botnet activity across the Internet in real-time. Malware affects more than 95% of the world’s Global 5000 enterprises each year, costing the global economy about $1 trillion. Most viruses, malware and botnets are designed for criminal activities, such as the theft of private information, money and intellectual property.
“What’s unique about Ara Labs’ solution is we actually do all this from the cloud so we don’t interfere with the network,” said Gorbani in an interview on Monday. “We also have a very effective dashboard that customers can use. We get a lot of comments from people that it’s very sleek and instinctive.”
He added the company since last summer has developed a “custom sandboxing” function that allows users to analyze malware and profile the people who sent it.
Ara Labs has signed up the city of Fredericton and the New Brunswick government as customers. Gorbani said it is also deep n talks with several Fortune 500 companies about adopting the system.
As well as paying a CEO and other staff, Ara Labs will use the proceeds to buy servers for the cloud on which the product operates. It will also cover the costs of patenting the intellectual property for the product, which is owned entirely by the company.
NBIF typically seeds New Brunswick startups with $100,000 to $500,000 investments then works with its portfolio to attract follow-on funding. The agency recently recorded its second exit in three years when UserEvents, which received a $250,000 investment from NBIF in November 2012, sold out for an undisclosed price.
“When Ara Labs first pitched their business to us back in August 2013, we could see the desirability of their system immediately, especially considering the enormous amount of Internet fraud perpetrated every year,” said NBIF chair Robert Hatheway in a statement. “Since then, we’ve been working with the company to raise the capital it needs to get its product to market and put to use immediately.”
Technology Venture Corp. is a private Moncton investment firm, which last year committed $5 million to the regional venture capital fund Builid Ventures. It has also co-invested with NBIF on other ventures, such as Fredericton-based structural assessment company Inversa.
Gorbani developed the product with CTO Hadi Shiravi, VP Engineering Ehsan Mokhtari and Ali Shiravi. All are PhD candidates in Computer Science at UNB, specializing in network security.
This article was originally published on Entrevestor, a site which produces daily news reports on the Atlantic Canadian startup community.