This article is from the March 24 issue of The Advertiser Digital Edition.
A GROUP of Adelaide entrepreneurs is seeking to raise up to $US25 million to develop a cloud storage platform it believes can compete head-to-head with giants such as Dropbox and Google Drive.
Cryptyk is described by its founders as “the world’s most secure cloud security and storage system” and is being developed by a team of tech and cybersecurity experts in Adelaide and Silicon Valley.
The team is led by chief executive and quantum physicist Dr Adam Weigold, who established laser business Photonica in Adelaide before relocating to Silicon Valley in 2011.
He is supported by a global team including marketing and business development specialist Luke Lombe, computer scientist Daniel Floreani and cybersecurity expert Derek Grocke, who all operate from Adelaide.
A prototype has been built by the Cryptyk team but it is now seeking additional funding through an initial coin offering (ICO) to develop the blockchain-backed technology into a final product. An ICO allows funds to be raised anonymously over the internet by issuing newly created digital tokens.
Last month, marketing and communications agency Mihell & Lycos revealed plans to raise up to $42 million in Adelaide’s first and biggest ICO.
It is developing an experiencebased digital game known as Forever Has Fallen, in which players communicate with characters and other players via social media, text messaging, email and other media.
Mr Lombe, who has spent much of the past decade working as a consultant in China and the US, said the Cryptyk platform’s cybersecurity features e , backed by blockchain technology , offered a point of difference in the market.
“We are creating the most complete cybersecurity and cloud storage platform in the world,” he said.
“For our enterprise users it is taking away a significant amount of the cost and complications. Usually you would have to use three or four softwares linked together to reach even close to the same effect that we’re achieving with one.
“It is so far and away more secure than anything else on the market – it’s a game changer.”
Cryptyk’s Vault storage platform encrypts uploaded files and “shards” them into five segments. It then re-encrypts each segment before storing them on separate cloud platforms such as Dropbox and Google Drive.
A blockchain platform known as Sentry is then used for auditing, tracking and monitoring all user access and file sharing.
Cryptyk has already been named one of Enterprise Security magazine’s top 10 start-ups for 2018, and last year took out the cybersecurity award in the University of Adelaide’s eChallenge program.
Mr Lombe said by bringing cloud storage and blockchain technology together, Cryptyk offered multiple layers of protection against security threats.
“In terms of compliance and in highly regulated industries like finance, healthcare, education, media and construction, you have a really robust platform that is basically unhackable, with a record book of every transaction on the network that can’t be changed either ,” he said.
A private pre-sale period is currently open, with accredited investors being offered Cryptyk tokens at US10c each until April 20. A public sale campaign will kick off on May 1 at a price of US12.5c.
The ICO caps the total number of tokens to be issued at 750 million , with a third being offered to external investors, a third to company management and seed investors , and a third to the Cryptyk Foundation.
The foundation will be used to recruit new users to the platform, to incentivise third-party software programmers and developers to build add-on features to the technology , to develop partnerships with other tech companies and to maintain liquidity in the secondary market.
Mr Lombe said the tokens would be used by clients to purchase subscriptions to the Cryptyk platform, with their value expected to increase over time as platform usage and popularity increases.
He said a minimum of $US3 million in funding was needed to progress development of the product, with a maximum of $US25 million to be raised.
Once the public sale closes on June 1, Mr Lombe said plans were afoot to establish a head office in Silicon Valley, supported by offices in Adelaide, New York and the digital currency hub of Zug in Switzerland . The product is expected to be released to the market in mid 2019.
“What this gives us is a nice international footprint from a business development point of view,” Mr Lombe said.
“It also gives us a great presence from a talent perspective. We’re looking to have an office here (in Adelaide) with support staff, with business development and potentially with programmers and developers as well.”
He said Cryptyk’s management team had pre-empted potential regulatory changes in the ICO market, which was currently “flooded with scammers” .
“There are a bunch of companies popping up where the blockchain aspect is completely redundant and irrelevant , and it’s just a cash grab,” he said.
“We need more regulation, 100 per cent. There are too many scammers out there, there are too many people looking to defraud mums and dads, and it’s a bit of the Wild West at the moment.
“I’d put a caveat out to anyone who’s looking to invest in an ICO to thoroughly do your research, make sure that it has a strong team of qualified people , an excellent product offering that’s solving a real-world problem with a viable market and the potential to monetise that market.”