Amazon’s cloud computing arm announced plans to team up with a Virginia-based incubator for cybersecurity startups.
Amazon Web Services agreed to be a multiyear platinum sponsor of the Mach37 Cyber Accelerator, a program that aims to spur the growth of small startups making cybersecurity products for the private sector. The company will have “the opportunity to engage with and help guide the next generation of security product companies launching from the Mach37 Cyber,” according to a press release issued last week.
Officials would not disclose how much funding AWS is providing to the incubator.
“We are on the leading edge of security innovation, we’re getting some of the best security innovators from across the world,” Rick Gordon, managing partner of Mach37, told StateScoop. “So they [AWS] want access to that, and I think we’ve developed a really strong brand. Alignment with that brand is really good, good for us and good for them.”
Founded by Virginia and the nonprofit Center for Innovative Technology in 2013, the incubator originally received funding from the state. However, that money is set to run out this summer, so founders have been seeking outside funding. Currently, General Dynamics is the only other platinum sponsor.
“Clearly cybersecurity’s bidding had grown and was the source of a lot of economic growth in the Virginia region, but all of that cybersecurity growth related to commercial enterprises was being neglected,” Gordon said.
Companies that are part of the program attend presentations of industry experts to hone sales pitches for seed investors.
Dmitry Dain, a cofounder of cyrptographic software company Virgil Security, said he was drawn to Mach37 because of the help the program gave fledgling companies like his to develop a marketing and investment strategy.
“We had an idea but we weren’t sure whether there is a market for it, whether we could pull it all together, whether the timing is right for having a company like this, so this is the kind of thing to discover as part of the Mach37 program,” Dain said.
Located in a large, open office near Dulles Airport, March37 brings in as many as six companies for four hours a day, several days a week to exchange ideas. The space is big enough to fit up to 200 visitors, which it does on the demo day that ends each cohort’s term.
“Usually they have a presentation or a speaker who is coming that day to teach them something, sales or marketing,” Dain told StateScoop. “And they typically bring people on the kinds of companies they have in the cohort.”
Since the program launched, applications for the incubator have dramatically increased: Nearly 600 businesses applied for six spots in the spring 2016 class. But Gordon said the true measure of success of the program will be how well its graduates do.
“The ultimate proof in our success is going to be our companies, they grow, they scale, and they exit,” Gordon said. “And Virginia sees a significant return, not only a financial return back to the Center of Innovative Technology but also an economic development return, mostly measured by the number of jobs created.”
Earlier indicators have been good, he said: So, far more than 70 percent of the companies in the incubator have been able to bring on investors. He hopes in the long run, the startups will eventually give back to March37 to help it become self-supporting.
In the meantime, Dain said the recent announcement from AWS bodes well for the incubator’s future.
“This is great for the program and especially for the cohort that just graduated,” Dain said. “It definitely shows the strength of the program and what they’ve been able to achieve over the last couple of years.”