Fredericton cybersecurity startup Gray Wolf Analytics has closed a $500,000 equity funding round, including $200,000 from the New Brunswick Innovation Foundation, and raised another $700,000 of non-dilutive funding from Mitacs and other sources.
Gray Wolf grew out of research by Dhirendra Shukla, the company’s President and Chair of the J. Herbert Smith Centre for Technology Management and Entrepreneurship. The research, focused on monitoring possible criminal activity related to blockchain technology, was also funded by NBIF.
Chief Executive Matthew Sampson said in an interview that Gray Wolf now has a minimum viable product and is working on customer validation. A handful of clients in Canada and internationally are testing a production version of the technology.
“We're validating with customers, and it's giving them great value,” said Sampson. “We’re beginning to commercialize it and make money. It's going quite well.”
Blockchain is the underlying technology behind cryptocurrencies, including Bitcoin and Etherium. It allows for anonymous financial transactions, which raises the spectre of money laundering.
But blockchain systems create ledgers that track all transactions. Gray Wolf is aiming to use the behavioral and transactional patterns of users to identify potential cases of money laundering -- a process similar to how conventional banks spot bad actors -- while preserving the anonymity of legitimate users.
“We’re not a surveillance company; we’re a safety company,” Sampson said. “We make sure organizations understand the risk that they pose to their economy, their business, to their users and how they can mitigate that.”
He said Gray Wolf will sell its technology under a software-as-a-service model, with pricing erring on the side of affordability. So far, the exact price varies depending on the size and resources of the specific client.
Gray Wolf will spend the money on additional research and development.
The $500,000 of equity funding will go towards paying the salaries of employees working on research and development, sales and the commercialization process. Sampson said Gray Wolf has seven employees spread across Canada.
Unlike other Atlantic Canadian startup execs, who have said the rise of remote work has made recruitment more challenging by increasing employer demand from outside the region, Sampson said work-from-home culture has been a chance for Gray Wolf to hire from a broader base of applicants.
“We try to do our best to reap the benefits of remote work,” he said. “We're also maintaining that sense of community from working in an office.
“What's beautiful about the situation we're in with Gray Wolf is that the space we’re in... resonates with a lot of people in terms of [the fact that] we're trying to do good and work with bleeding-edge technologies.”