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Between January and September this year, Australians lost $424.8 million to scammers (that's more than $47 million a month).
Aussie cyber star’s new firm banks $10m to stop online identity fraud
The co-founder of Aussie cybersecurity firm ThreatMetrix, which was acquired for more than $1 billion in 2018, has raised $10 million for his new cyber firm Darwinium, which claims to be able to help companies stop their customers falling victim to online fraud.
Alisdair Faulkner founded Darwinium 18 months ago, with a number of the team who built ThreatMetrix, and has built a product he says is getting early traction with e-commerce operators and big online marketplaces.
Alisdair Faulkner has raised $10 million for Darwinium, a company he says can take away some of the risks of identity theft for online shoppers. Renee Nowytarger
The sale of ThreatMetrix to British multinational information and analytics company RELX Group marked Mr Faulkner as one of Australia’s most successful cybersecurity entrepreneurs.
He told The Australian Financial Review he viewed Darwinium as the company he had always wanted to build, as it would take away some of the risks of identity theft for citizens who have had their payments or login credentials stolen or compromised.
“Darwinium is the company I’ve been building my entire life. ThreatMetrix was the pivotal step that actually enabled it,” Mr Faulkner said.
“As such it is named after my hometown, Darwin, which in turn was named after Charles Darwin ... One of our company mottos is ‘survival of the unfittest’, as that is who we have to protect.”
The recent focus on cyber threats in Australia, due to high-profile data breaches at Optus and Medibank, means Darwinium is making its public debut in a market where front page headlines are helping its sales pitch.
Its product promises to reduce the threat of having your online credentials stolen, by making them useless to the crooks trying to use them.
Working from a principle that customers are likely to lose some of their credentials in increasingly common data breaches, Darwinium is a platform that sits across a company’s digital presence, and watches for signs of bad or inconsistent behaviour.
It can flag and prevent transactions, where it has spotted signs someone is trying to conduct fraud, with someone else’s password or credentials.
“Darwinium is built for a world where there are no longer secrets, or where you cannot rely on secrets, if you assume that people’s online passwords are going to get stolen, then we turn behaviour into identity,” Mr Faulkner said.
You can determine the difference between the way that two different individuals are accessing systems, which can be helpful to stop data breaches or theft of money.
“An analogy would be noticing if someone who usually does something left-handed is using their right … Protecting customers is good for business, and it’s good for your brand.”
Second-time founder
Mr Faulkner said the capital raising experience in Australia was much easier now than when he had been trying to raise money for ThreatMetrix, due to a much more active local venture capital scene.
The funding round was led by Blackbird Ventures, alongside AirTree Ventures, and also included investment from well-known international angel investors including AngelList’s Naval Ravikant and Jeff Fagnan.
As with ThreatMetrix, Darwinium has its official headquarters in the US, with all of its research and development done from Sydney and a sales presence in the US and UK.
Mr Faulkner said with ThreatMetrix this had been because that was where the money and exits happened, and he still believed it would help financially due to the US being Darwinium’s largest target market.
However, he said he had come out of a short retirement after selling his former company partly because of a “sense of duty” to show that world-class cybersecurity companies could be built in Australia.
When ThreatMetrix was growing it had found it more difficult to win business from big Australian companies than from larger international firms, something that needed to change.
“Basically, we have to get over the cultural cringe of using our own software. For some reason, we believe we can be the world’s best sportspeople, but we don’t seem to think that we can build the world’s best cybersecurity,” Mr Faulkner said.
“The likes of Atlassian and Canva have shown that we can certainly produce world-class software, and companies like PC Tools, Secure Code Warrior and a number of others prove that we can also be world leaders in cybersecurity.“
He said that, from a national security perspective, it was important for more technology to be developed locally. He has also invested in local cyber start-ups including Cydarm and CipherStash.
“I think retirement’s overrated, and I know only people that have had the luxury of retiring would say that, but I started again with a strong sense of duty as well, and of foreboding,” Mr Faulkner said.
“The writing is on the wall for a cold hot war, with information warfare and the knowledge that the next world war will be an automated war.
“When world war three breaks out it will be the data scientists who are conscripted.”
