Last summer, Fredericton-based cybersecurity startup Beauceron Security quietly raised an oversubscribed $3.1 million equity funding round that included strategic investors from the world of community banking.

The round was led by Utah-based BankTech Ventures, with the Independent Community Bankers of America, the New Brunswick Innovation Foundation, the Arkansas-based Venture Center and existing angel investors also buying in.

Beauceron raised the funds with an eye towards ramping up its North American expansion. One pillar of that rollout is co-founder Bob Corson joining the company full-time as chief revenue officer to head its sales, marketing and customer success teams.

“BankTech Ventures …. was formed as a strategic partnership consisting in most part of limited partners from the community banking sector in the United States, which is an area we’ve become very familiar with over the last two years through the Independent Community Bankers of America’s accelerator program,” said Beauceron CEO David Shipley in an interview.

“Almost two-thirds of all small business loans come from community banks. They obviously have a significant risk when it comes to cyber themselves, but moreso is the risk to their small business customers, and how we can help them help their customers is an interesting conversation we continue to have.”

Beauceron sells enterprise software that trains employees to recognize and avoid cybersecurity threats that rely on poor security practices and “social engineering” — behavioural manipulation techniques, such as phishing emails.

The company offers multiple versions of its technology, including more sophisticated, feature-rich options for large enterprises and simpler, easier-to-deploy versions for smaller customers.

The versions for smaller clients are particularly focused on reducing the load on organizations' often overtaxed or even non-existent IT teams.

Shipley said Beauceron’s software produces, on average, an eightfold reduction in users’ risks of falling for phishing emails within their first 90 days of using the platform, as well as improvements in their ability to identify and report suspicious emails.

“That's sort of a big focus of our technology in the last few years, is how do we take advantage of the fact that our unique approach to give people a personal (performance) score has really motivated them to go hunting in their inboxes, to be more wary of threats, but also to be the sheepdogs for their organizations,” said Shipley.

Social engineering attacks are becoming an increasingly ubiquitous part of digital life for many businesses. Research from SlashNext, a California security company, found that phishing attacks increased by nearly two-thirds in 2022, compared to 2021, for more than 255 million attacks worldwide.

Shipley also warned that the rise of artificial intelligence chatbots like ChatGPT from OpenAI will likely contribute to the problem of phishing attacks by making it easier to launch attacks at scale and reducing barriers to entry for non-English speakers.

So far, Beauceron has around 57 staff, up from the high 30s this time last year, and Shipley said he expects to keep the team at about that size until the company’s next capital raise.

Many of the newer employees were actually onboarded before last summer’s funding round closed. Shipley said those new hires were made on the back of strong sales and revenue growth.

He added that Beauceron has faced stiff competition from other players in the cybersecurity education space, prompting the company to file for its first patent last year.

“Part of the reason we were a little patient about announcing this funding is some of the biggest vendors in the space have tried to basically copy us and pay very close attention to the stuff that we do,” he said.