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Cambridge startup Co3 Systems Inc. is betting that the 3.2 million Massachusetts residents – nearly half – who have been victims of data breaches over the last four years will drive the demand for his company’s data breach management software.
A report released this week by the state’s Office of Consumer Affairs and Business Regulation cites the fact that there have been 1,800 incidents in which banks, hospitals, retailers and other organizations exposed the personal data, such as Social Security and credit card numbers, of customers. CEO John Bruce told Mass High Tech that most security software focuses on preventing a data breach.
“If you look at what’s available if something actually does happen, there’s almost zero,” he said.
His software helps a company prepare for what Bruce calls an “inevitable” breach with specific information on all the different laws. Bruce said the basis of the business is the spate of laws regarding data breaches which states have passed in recent years. Massachusetts’ Data Security Breach Law went into effect in 2007, and Bruce says that 46 of the 50 states have all passed their own versions, all with different requirements and hefty fines for companies that don’t comply.
He added that while the software is designed for companies to use ahead of time to prepare for a breach, it will still help a company after the fact, just less efficiently.
He says he’s grown the company from five to 15 employees in the last five months at the same Cambridge headquarters, where, he says, two former successful tech startups – RSA Security, later sold to EMC, and Allaire Corp., which was acquired by Macromedia – also were based.
Bruce said the last installment of the company’s Series A round of funding, which he says is between $5 million and $10 million and was announced in January, is expected next week. Bruce also expects to announce a partnership to sell its product through a major New England insurance company within weeks.
Bruce himself is a serial entrepreneur who founded Quickcomm Software Solutions in New York City, Awareness Inc. in Burlington and Authentica, now part of EMC.