On Tuesday, two local startup alumni from Herndon, Va.-based cybersecurity accelerator Mach37 announced that they had dually raised seed rounds. McLean-based Cyph, developers of an encrypted messaging app, and Manassas, Va.-based Virgil Security, creators of a cloud-based public key management service, raised $500,000 and $525,000 respectively.
The news comes less than 12 months after Cyph and Virgil Security graduated from the immersive 90-day program.
Since Mach37’s inaugural Fall 2013 class, the accelerator, backed by the state of Virginia via the Center for Innovative Technology (CIT), has graduated 22 companies in total.
Outside of the most recent Spring 2015 cohort—which included 5 cybersecurity startups with perhaps an inadequate amount of time to negotiate conditions of investment—there have been a total of 17 graduates since 2013.
Of these 17 companies, which consist of alumni from Fall 2013 to Fall 2014, 11 have received seed funding since gradating from the accelerator. The mark represents an impressive 65 percent investment rate for companies that complete the program.
— MACH37 (@MACH37cyber) June 22, 2015
Rick Gordon, Managing Partner of MACH37, told DC Inno that he hopes to establish a 70 percent standard in the future.
He added that the accelerator’s growing network of investors and mentors is directly contributing to this growth, but that it is primarily dependent on the talented entrepreneurs themselves, who have built the cybersecurity companies.
Mach37 mentors include the likes of George Schu, a retired senior executive from Booz Allen, Verisign and Oracle, and Phil Reitinger, a former Sony CISO and Deputy Under Secretary of the National Protection and Programs Directorate (NPPD) and Director of the National Cyber Security Center (NCSC) at the United States Department of Homeland Security.
“MACH37’s mission is to help entrepreneurs with great ideas transform those concepts into successful companies that address real needs in the security market,” Gordon said in a statement.
Mach37 portfolio companies typically receive an immediate $50,000 investment upon acceptance—a figure that can be doubled to $100,000 by the State of Virginia if the company decides to establish its HQ locally. In return, Mach37 takes an 8 percent equity stake in each company.
“In just one short year, we’ve accomplished a lot, and we’re looking forward to disrupting the secure communication market,” said Cyph CEO Ryan Lester in a statement.
Cyph’s $500,000 seed round was led by the CIT GAP Fund and Goel Fund. And Virgil Security’s $525,000 seed round was led by NextGen Angels, Inner Loop Capital and Panther Angels. Both companies came from Mach37’s Fall 2014 class.
— Virgil Security, Inc (@VirgilSecurity) February 25, 2015
Next week, Mach37 will introduce its newest cohort: the class of Fall 2015. This next group will include 7 companies led by 10 entrepreneurs. Gordon said that Mach37 has recently executed a number of investments in companies that specialize in encryption technology because of its broad application with consumer-facing software products.