Spokane tech startup CXOWARE has landed its first round of outside funding – a total of $1.25 million from an overseas investor and three regional venture funds.
CXOWARE provides software tools used by large and midsized companies to analyze financial risk and other risks that could disrupt their businesses.
Company CEO Steve Tabacek said the funding includes roughly $1 million from Belgian entrepreneur and mathematician Henry Beker. Beker was a founder of U.K.-based information security company Baltimore Technologies.
Beker now has a seat on the CXOWARE board, said Tabacek.
An additional $250,000 came from Spokane Angel Alliance, Spokane’s Inland TechStart Fund and one member of the Seattle Alliance of Angels.
Tabacek started and helped grow Liberty Lake-based IT-Lifeline, a business continuity and recovery services provider. Tabacek still owns 30 percent of that company, but left three years ago when the board wanted a new CEO.
In early 2011 Tabacek and colleague Jack Jones teamed up to start the new company. Jones, a former chief information security officer with Nationwide Insurance, developed a prototype of an analytic tool that would identify the critical areas of business vulnerability.
Those concerns include theft, cyber fraud, external issues like hostile takeover, disruption of the supply chain and other factors. Jones’ breakthrough was coming up with a detailed tool that could estimate a company’s risk in monetary terms, Tabacek said.
Companies, many of them in the financial services sector, now see the need to identify risk potential and find ways to prioritize risk mitigation budgets and manage that exposure, Tabacek said.
The company has a staff of five with offices in the McKinstry Innovation Center east of downtown Spokane. Tabacek said the headcount will grow to eight in the next 30 days as the investment is applied to stronger marketing and business development.
The first year and a half, CXOWARE relied on his own and Jones’ funding, Tabacek said.
The partners used a Pullman tech company, Integrated Engineering Solutions, to develop the software used by customers. By 2013 Tabacek said they had a dozen paying customers, most of them in financial services and the energy sector.
That success set the stage for seeking outside investment, Tabacek added.
“Risk management and risk reduction are huge right now for public companies in health care, energy and even the non-public sector,” Tabacek said. “It’s a growing area of focus, and we think we’ve hit the timing dead-on.”
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