With Undisclosed Siemens Funding, CyberFlow Closes $4M Seed Round

San Diego network security startup CyberFlow Analytics said it has closed out its seed funding round after raising a total of $4 million from Toshiba America Electronic Components, angel investors, and Siemens Venture Capital, which did not disclose the size of its investment.

As part of the deal, CyberFlow also formed a strategic partnership with Siemens, according to CyberFlow president Tom Caldwell.

CyberFlow formed a similar partnership in 2013 with Toshiba America Electronic Components. At that time, CyberFlow disclosed that Toshiba had made a $2 million investment and that angel investors had contributed another $600,000. So it doesn’t take too much guesswork to estimate the Siemens investment, which closed the seed round, at about $1.4 million.

The funding raised from Siemens should enable CyberFlow to continue operating through 2016, when the company plans to begin seeking investors for its Series A financing round, Caldwell said. CyberFlow currently has 15 employees, he added.

Hossein Eslambolchi, a former AT&T chief technology officer, founded CyberFlow with Caldwell, a former Cisco executive, and Louis Gasparini, former CTO of RSA Security.

CyberFlow uses machine learning and advanced analytic software to monitor IP packets flowing into and out of the computer networks operated by the biggest companies in the world. The company establishes a base line of normal behavior for devices on a network—and then watches for deviations from the norm.

CyberFlow has sought to forge partnerships with global IT companies like Toshiba and Siemens that provide managed security services, which includes cloud-based network management, threat assessments, and incident response. “We provide the analytical engine they can provide as part of their software as a service,” Caldwell said.

More recently, though, CyberFlow has also focused on the emerging market for protecting the Internet of Things (IoT)—the wireless networking technologies that enable machine-to-machine communications among devices in power grids, oil and gas fields, refineries, and in other industrial applications. Siemens, for example, is focused on the market for industrial IoT security at chemical manufacturing plants.

Citing IT analysts, CyberFlow said an estimated 4.9 billion connected devices would be part of IoT networks this year, a 30 percent increase from 2014. The company’s statement quotes Eslambolchi as saying, “In today’s world, attackers use a variety of methods to attack organizations and CyberFlow analytics is bringing a new and unique solution to the market to thwart security attacks.”

Caldwell said CyberFlow also is anticipating a convergence of conventional IT networks and so-called SCADA (Supervisory Control and Data Acquisition) systems, the industrial monitoring and remote control equipment.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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