Fulton-based DataTribe is seeking applications for its sixth annual DataTribe Challenge for cybersecurity startups. And in this tighter market for venture capital funding, the $2 million in seed money it's offering to the winner can go a long way.
DataTribe, which bills itself as a “cyber foundry,” invests in and co-builds cybersecurity and data science companies. Its startup challenge is a pitch competition that concludes with three finalists splitting $20,000 in prize money, with one of the three ultimately claiming up to $2 million in seed capital from DataTribe. The firm invested $2.5 million in last year’s winner, Columbia-based cyber startup Balance Theory, because of its founders' experience and the market fit of its offerings.
For this year's competition, the criteria for finalists is even stricter due to high inflation and interest rates making venture capital more conservative and seed valuations lower because of the increased risk. John Funge, managing director of DataTribe, is looking for companies that have that unique mix of offensive cybersecurity expertise and team chemistry that can only be found in Greater Baltimore, where the National Security Agency and the U.S. Cyber Command reside. The deadline for applications is Sept. 23.
“It's really governments that have whole staffs of people that do nothing but essentially offensively hack for a living and we believe those people have unique insights about what’s the next thing in cybersecurity,” said Funge. “What we like to do is try to find ideas and people out of those communities and say, ‘Let's work together and let's go create a defensive product that we then sell to companies.' That’s the DataTribe playbook.”
Funge built and sold three companies himself before joining DataTribe in 2018. His first company, internet systems maker Clara Vista, was acquired by CMGI in 1999, then he started Incando in 2004, a provider of video-uploading software for websites that was later sold to Scripps Networks, the parent company for the Food Network and HGTV. The last company he founded and sold was streaming analytics company BrightContext, which was acquired by Bethesda's WealthEngine.
DataTribe employees spend weeks with each of the startup finalist companies, helping mold each's pitch into a tight story for the main event, which will be held this year on Nov. 2.
The deciding factor in Funge’s experience that decides whether a company will succeed comes down to the chemistry of the founding team. If he had to choose between a great idea with an OK founding team or a great founding team with an OK idea, he said he'd choose the great team every time.
“What will happen inevitably is that you will start thinking you’re going to do this and then you're gonna end up kind of adjusting, evolving,” said Funge. “Some companies end up making a really big adjustment, aka a pivot. But you're definitely gonna need to adjust your strategy and your approach along the way and having that right group of people that have the agility, work ethic, discipline and integrity is really the foundation.”
Since the Cybersecurity Startup Challenge’s inception in 2018, it has invested $13.4M in the winning companies.
