Reston cybersecurity startup Hypori is more than halfway toward its goal of raising $18 million in a series B funding round.
The company said last week that it raised $10.5 million from a group of investors led by New York venture capital firm Hale Capital Partners and including San Francisco-based GreatPoint Ventures, an existing investor, and retired U.S. Army General and former CIA Director David Petraeus.
Hypori developed a technology that protects the organization's sensitive data when a user is logging in from a personal device. Its software essentially creates a second "virtual phone" within a user's personal device that allows the organization's data to remain secure.
Hypori's primary clients are the U.S. Army and the Department of Defense. A chief selling point of the technology is that it can save organizations from having to buy work devices for their employees, said CEO Jared Shepard.
Shepard said the virtual phone is a cloud application, so it is hosted on a secure server elsewhere and a user’s phone, tablet or personal device of choice has no actual data connection to a company’s network. “The beauty of it is...it can't be hacked. It can’t be intercepted. It can’t be affected by ransomware or malware. So that means that corporate information is actually safe regardless of the state of your actual physical phone," he said.
Security and privacy go both ways. Since the software doesn’t share data from the company, it also doesn’t share a user’s personal data with employers.
“The reason why a lot of people carry two phones is because they don't want their company to see what they're doing on their personal device. They don’t feel like their company has the right to know,” said Shepard.
In 2022, the company generated a little more than $15 million in revenue according to Shepard. The series B will be used to market the software to the private sector, particularly financial services and health care companies.
Shepard points to recent $200 million fines the Securities and Exchange Commission levied on JPMorgan Chase & Co and Morgan Stanley for allowing employees to conduct business on personal phones via messaging apps like WhatsApp as to why the market is primed for its technology.
In 2023, the company hopes to double both revenue and its headcount of 125 employees. Among the biggest challenges, Shepard acknowledges, will be building a sales team that is comfortable selling to both the public and private sector while trying to attract to tech talent from deep-pocketed companies that can generally pay higher wages.
“This is not just an app, this is actually an operating system running virtually inside a cloud, so the skill set for this is not your average engineer,” Shepard said, adding that he will offer stock options in his growing company to try to lure top-level talent.
Shepard said that this will likely be the company's last fundraising round until it is ready to make an acquisition.