How Cydalics is looking to unlock success as an Australian start-up

To find success, businesses tend to go where there’s the most support, even if that means looking away from home but despite a lack of homegrown backing from the federal government, Cydalics is charting its path to success in the Australian start-up scene.

The start-up, which was founded by Holger Arends and Daniel Straessle in 2020, develops advanced communications intelligence solutions which automate the analysis and detection of irregular and anomalous behaviour in customer network communications data with a strong focus on critical infrastructure, espionage and supply chain attacks.

This is a bit outside of what a majority of cyber vendors focus on in the current climate. When observing a network, Cydalics goes a step further, focusing on the entire environment by dissecting who and what type of device is connecting to it, whether it’s a small IoT sensor or potentially something more malicious at play.

“We focus on a different part of the market than traditional cyber security vendors,” Arends said. “Some large enterprises have no idea what IP addresses are connected to their network and all it takes is a small device with an antenna that could be transmitting highly sensitive data, potentially costing millions of dollars in lost revenue.”

Arends said the motivation behind launching a start-up in Australia was based on the value its platform can bring to the customer environment. 

The first couple of years of a start-up, Straessle said, is like surviving a bar fight – “you survive one hit and the next phase is already there”.

“Never give up. It’s very important that you’re self confident enough to have an idea that you believe in and don’t get distracted,” he said.

Over the last three years, both cofounders have developed key strategic relationships with global partners and have built a dedicated shareholder and advisory team, also working with a couple of customers in Australia. 

With a team of about 17 developers, Arends highlighted finding a team to help you achieve scale was a top challenge, along with obtaining support as a start-up in the Australian market.

“It’s very hard for an Australian company to grow in the technology sector,” Arends said. 

“There is no funding from the federal government, nothing in AI, software development, nor in cyber, which is very hard to understand nowadays with all these kinds of opportunities.

“I think Asia and the Middle East are very open towards Australian companies and I think that is an advantage.”

Arends said it was currently working towards the company’s next round of funding to expand its reach using Australian-based developers and to also expand into Switzerland, where Straessle is currently based. 

Arends was previously working as the technical area lead of cyber security at the centre of excellence of technology and innovation for Telstra in 2021 while Straessle himself is the global banking outsourcing CISO for Swisscom. 

The Cydalics platform, Cy-mind, is continuously being improved to include more sophisticated and adaptable machine learning algorithms, the capability to ingest traffic data from all modern networks and will include a new advanced self-help functionality. 

“I’ve worked in cyber security for a while and whenever you interact with traditional vendors, it’s always about their point of view that they’re trying to push on your organisation. It’s like they define the processes, they tell you what they think is important and you have to basically go with that,” Straessle said. 

“Holger and I worked together at AGL and we started talking about how we would like to give the customer the power to use a tool how they would like to use it.”

The proliferation of IoT and communication devices made it more important to understand this type of traffic, Arends said.

“It was clear the same thing was missing and that was really an end-to-end overview of where and who was communicating with whom, why and what it means is you always had a dependency on a pool of information called logs for example. Someone goes into a system and does something, it is logged and stored somewhere,” he said. 

“If the system communicates with somebody else, there is very limited information and it is very hard to actually understand what the entire environment is all about.”