Cisco

Sookasa, a 2.5-year-old, 12-person startup in San Mateo, Ca., is taking the wraps off its business today, as well as unveiling $5 million in Series A funding led by Accel Partners, which it closed on last August.

No doubt Accel was attracted to the startup’s technology, which promises to dramatically simplify the protection of sensitive files across popular cloud applications and mobile devices. As services like Dropbox and Box become increasingly ubiquitous and more employees use them to share files with each other and people outside their companies, businesses in particular need a better way to manage and protect that data. Sookasa, a cloud-based offering, says it make the process of encryption so easy that even a sole practitioner can get up and running as easily as he or she can sign up for Dropbox itself.

Yet Sookasa is interesting for another reason. In addition to cofounders Madan Gopal and Chandra Shetty — both senior engineers from Cisco, formerly — Sookasa’s founders are a father and son who serve as CTO and CEO, respectively. Israel Cidon was long a professor at Technion in Israel; he also founded four prior companies, including Actona Technologies, acquired in 2004 by Cisco. Asaf Cidon, a PhD candidate at Stanford, spent a year working in R&D at Google after spending three years in the intelligence section of the Israel Defense Forces.

Asaf Cidon talked with StrictlyVC the other day about the company and what it’s like to work with his dad.

You want to allow professionals in regulated industries, like health care, finance and legal, to use their favorite cloud services in a secure way. How is your service different from what already exists?

The issue with other types of solutions is that they’re only good as long as you’re accessing the cloud through a company computer or company network. If you’re sharing with someone outside of company, they can’t access the files. We encrypt files anywhere they go.

What was the impetus for the company?

Dad and I are both geeks who’ve been mucking around for years on crazy ideas and we were [storing] a lot of our documents on Dropbox. And we asked ourselves: Where is our data? Where are all the copies of these files and who can access them? What we found was those are really hard questions to answer. These services keep a lot of different copies and it isn’t clear who can access them. It’s an interesting problem to address for consumers, but even more so for businesses, where you can get fined $5 million for a HIPAA breach, for example.

Not many entrepreneurs launch companies with their fathers. What it’s like?

There probably aren’t many cases where founders have started a tech business with family members — though Mendel Rosenblum cofounded VMWare with his wife [Diane Greene], which is an even more precarious situation. [Laughs.] My dad and I really get along, though. We’re also very different. He’s a professor who’s really interested in hard problems; he’ll obsess for a week over [some aspect of] encryption architecture. I love the business side and how we find the right business positioning and sales, which I didn’t always know I would.

You raised $5 million in Series A funding in August, after raising $1.7 million in seed funding in 2012. Why announce it now?

First, we had to go through extensive security and HIPAA audits by [the audit firm] Praetorian, to [ensure we meet all the technical safeguard requirements]. We also wanted to wait until the product was simple enough for the public to use. We have customers, but an encryption product isn’t necessarily easy to explain to a doctor or nurse or even a lawyer. Now the product is in a state where you put your folder in Dropbox and it’s encrypted, it’s done. You don’t even know it’s there.

For inquiring minds, will be you be in the market for more funding this year?

We’re not right now looking for a Series B, but we’ll need funding to expand. We’ll probably need inside sales [staff] pretty soon. With our ambitions, we’ll be going through at least one more round — to put it mildly.

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Don Dodge – a Google Ventures advisor who helps developers build new applications on Google platforms and technologies – says VCs are still outsiders when it comes to indoor mobile location services. He likens the moment to the earliest days of maps and GPS, which are now integrated into just about every application on the Web, but that few investors knew what to do with initially.

Here’s an excerpt from a conversation we had last week:

You’re very focused on indoor marketing. Why?

At a very high level, we spend 90 percent of our time indoors, and indoors is where commerce happens.

What’s one of the most interesting things you’re seeing?

There are a bunch of companies that can create [digital] floor plans of stores like Toys”R”Us, Office Depot and Walgreens. Stores then give them SKU [stock keeping unit] maps that tell them where products are located on the shelves for inventory purposes and so forth, then [the apps] use indoor location technology to recognize in what aisle a consumer is standing, and by what products. It isn’t too far of a leap to imagine that as you’re looking at the Gucci bags at a department store, you receive a coupon from Coach.

What strikes you promising beyond retail applications?

Think about mobile games that could take of advantage of location, like Risk or Monopoly or Capture the Flag, and how they might incorporate the store that you’re in or the university dorm that you’re in.

There are social aspects, too. Say you’re at a concert and know that five friends are there amid 50,000 other people. Indoor location technologies can tell you exactly where those five friends are. And there are probably 400 more examples of market applications that no one has thought about yet.

There are numerous technical approaches to all of these things. How different are they?

One is Wi-Fi, where you phone accepts signals and triangulates where you are. WifiSLAM, an indoor GPS company that Apple recently acquired, was one example, but there are about 15 other companies that are doing things with Wi-Fi triangulation.

Another area is Bluetooth beacons. Every smartphone has Bluetooth to connect to other devices. Well, the same Bluetooth channel can be used to bounce off known locations to determine where you are.

Other companies are using sound waves, while others still, like Bytelight, are using LED lights in the ceiling. They pulse at a rate of a hundred times a second, which is faster than the human eye can see, but the front-facing camera of a phone can pick up the pulse and know by which light you’re standing.

Apple reportedly paid $20 million for WiFiSLAM. A number of other companies, including Cisco, Ruckus Wireless, and Aruba Networks, have recently acquired indoor technologies for undisclosed amounts. Is there going to be a big breakout story here?

It won’t be like social, where there are one or two leaders and everyone else is an also-ran. Instead, there will be hundreds of winners because there are so many different market applications and vertical applications.

And you think VCs are missing all the action. Why?

There have been at least three major acquisitions over the past four months, so now they’re saying, “Hey, there’s something going here.” But by and large, it’s a new, emerging area, with probably 50 small, unknown startups with angel investment or a little VC money that [other] VCs aren’t paying attention to.

When you see more stories about companies being acquired by big companies, then there will be a land grab.

Photo courtesy of Google Ventures.

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Cisco

Accel Partners Backs Father-Son Team in Sookasa

Don Dodge on Indoor Marketing: VCs Missing a “Huge” Opportunity