Growing the Cyber Industry in Montgomery County
in Conversation with Inky Innovator Dave Baggett
Inky is an innovative, growing cybersecurity company in Montgomery County, Maryland, that has created a unique defense with its product called Inky Phish Fence: an email protection gateway that uses sophisticated Artificial Intelligence (AI) technology to block deep sea phishing attacks. Based in the Rockville Innovative Center, the company has recently received a funding infusion of $5.6 million to enhance its analytics capabilities for its proprietary software and to expand its marketing capacity.
We talked with Founder and CEO, Dave Baggett, about the company, the funding, and the future.
Tell us about the origins of your company.
We started out wanting to work on encryption and as we began our research and work, we ended up hearing from many CISOs (Chief Information Security Officers) that the real problem was phishing. (Phishing is the fraudulent practice of sending emails purporting to be from reputable companies to induce individuals to reveal personal information, such as passwords and credit card numbers). Hackers use all kinds of clever tricks to get past the previous generation of email protection software, like what is built-in to Microsoft Office 365. Attackers have found ways to evade those filters with phishing.
When you have a large customer base asking you to build something, usually the right answer is yes!
We quickly came around to focusing on the widespread phishing problem. Since my background is in AI (Artificial Intelligence) we wanted to make the machine essentially smarter to be able to block fraudulent mail before it gets to the end user. We figured out how to make Inky ‘see’ the mail almost like a person does and be able to prove if it’s from a legitimate server – or not. CISOs were desperately seeking a solution. Basically, we were asked to build it.
What makes your company different?
We have created algorithms (computer vision and machine learning) that are unique to us. As far as we know, no one is even close to developing anything similar. The tricky party is training the models. Once you get the algorithms working as we have, the burden is much less on the end user. Most of this bad stuff is blocked before it gets to the end user. We’re training the computer for you.
The FBI has identified phishing as a huge – and costly – problem.
The FBI calls business email compromise a $5.3 billion problem globally – and growing.
The FBI calls it business email compromise (BEC) and it’s a $5.3 billion problem around the world. The FBI puts out a regular bulletin estimating the amount of wire fraud – and that’s only the reported amount. The idea is you get an email from a person you trust, act on the email to wire money, and the money goes to some international crime group impersonating a person you trust.
You recently received $5.6 Million from ClearSky Security, Blackstone and Gula Tech Adventures. How did the funding develop?
You just can’t predict. We were planning to raise money a little later. A customer we work with told ClearSky, you need to look at this company; what they are doing is amazing. This connector brought us together and in a short time they were in our office. It was just a two-month process, which concluded with us raising almost $6 million dollars, unusually quick for a VC process.
A cool thing about our technology is the initial disbelief. Once people see that it’s working, then it’s an ‘oh my gosh’ moment. The thing they thought was impossible is really working. That’s a strong motivator for investors and potential customers.
With the funding, how will you be able to scale up?
One way is to hire more people, particularly in the sales and marketing area. Having a great product matters, but we need to get the word out more that we exist – take it to the next level. We hired Lisa Ackerson, our new VP of Marketing. We’ll use some of the funding to build out a sales team and massively increase the access to the product. To start, we’ll focus on the U.S. market. We’re also doing some experimentation with the U.K. market. No reason it will be limited. The problem is universal, and people are getting phished everywhere in the world.
Who is in your target market?
It’s not so much industry based, but mid-sized companies are our primary target. They don’t have a solution unless they use a product like ours. Everyone gets phished all the time. The leading indicator to know if a company will adopt our product? If they were phished recently themselves. Someone at the company wired money out and they don’t want that to happen again.
Here’s a recent example of an e-commerce scam. Someone took a real Pandora email and re-sent the email from their own account. Made it look like it was from Pandora, even created an entire fake ecommerce site. You could buy stuff, put it in your cart, put in your credit card information. The only difference was you never got your stuff! Completely fraudulent but looks identical to the real thing.
We are part of this disruptive, transformative change that’s happening in cybersecurity, the use of AI, making machines smart to solve these really difficult cyber problems.
How do you demo the product for potential customers?
We can turn it on for potential customers in their own environment. For a few weeks to try it to see for themselves. Usually in the first few days we find the phish and we show it to them to prove the value.
In its simplest form, Inky Phish Fence looks for signs of forgery. Or, if a questionable email is in a middle category, what’s cool is that Inky can put a banner in the mail itself that says this message looks unusual to Inky for the follow reasons. We’re flagging questionable things for customers. We are part of the next wave of companies.
Inky is located in the Rockville Innovation Center. Do you plan to stay there?
Yes, we are in the Rockville Innovation Center in Rockville Town Center. We plan to stay in the near term. As we grow, we’ll have to eventually look for a bigger space. We plan to have 25 – 30 employees by the end of 2019.
How has the Innovation Center and the DC region more broadly helped you?
It’s helped in a number of ways. On a base level, we have very affordable Class A space. The fact that it’s Class A space, we can meet people there and feel good about it. Especially with customers in cybersecurity, this region is incredibly important for that industry. There is the National Security Agency (NSA) along with other intelligence community groups. There is a massive talent pool. Most software startups gravitate to Silicon Valley but in cyber, the whole Maryland/DC Metro Area is a really good place to be. There’s a great customer base, especially if your product is relevant to the intelligence community. That’s not so much a factor for Inky, but it is a factor for many serving the government. Our work is focused on private enterprise.