A locally based tech firm is offering businesses a secure way to arm themselves against ever growing cybersecurity threats, putting the power of such protection in — and on — employees’ hands.
Token is gearing up for its first full-scale production run in the next couple of weeks.
The West Henrietta-based identity technology company manufactures a biometric, encrypted ring with a fingerprint sensor with multi-factor authentication.
CEO John Gunn spoke of the growing number of cyberbreaches globally, which are becoming more sophisticated.
As many as 60 percent of small- to mid-sized businesses have failed because of such a breach, he noted.
“It’s often a death sentence for these businesses,” Gunn said.
He is betting that Token can help with the problem, adding that authentication doesn’t have to be the top vulnerability in cybersecurity.
Token has a beta version of the product in the field now. The firm has taken the feedback it has received from users of that version, made changes based on that feedback, and is readying for its initial full-scale production run, Gunn said.
Once that is running, he expects orders for the product to follow.
“I’m confident we’ll be able to ramp up revenue quickly,” Gunn said.
The firm is on a growth path.
Token employs roughly 20 people now, including some based in Rochester and others who work remotely from outside the region.
The business is also hiring, looking for employees across the board, including research and development, engineering and sales and marketing.
Gunn — who was hired to lead Token earlier this year — is no stranger to startups. He has led and grown five such companies in his 30-plus years in the field.
He is bullish on Token’s technology, noting some of the cybersecurity measures available now are outdated and others are cumbersome and have multiple places where compromises can occur.
The rings protect against ransomware and data breaches, locking down the most common place of entry for hackers, he explained.
“When we’re feeling really bold, we say our product is un-hackable,” Gunn said.
What allows Gunn and his team to have such confidence is that fact that the ring must be on the user’s finger for the authentication to work.
It is also easy to use and can be set up in three steps.
“It’s the ultimate in user convenience,” he said, adding the rings are one piece of a company’s cybersecurity strategy.
Such technology may have a higher price tag than other options, he noted. The rings are subscription based and cost $15 per user per month.
However, it is less than a business would likely pay in ransom from a hacker, Gunn noted.
The company plans to sell to other businesses directly or through resellers. He expects initial interest to come from firms who would be main targets of a cyberattack, such as those in banking and finance, retail, energy, health care, construction and government.
Sourcing components – there are nearly 90 used in each ring and many come from Asia – has been among the company’s biggest challenges of late, due to global supply chain issues.
But staying on top of the supply chain problem and looking at all possible solutions has helped, Gunn noted.
Funding, on the other hand, has been less challenging.
The business got an infusion of capital last year — $13 million — from Grand Oaks Capital, the local investment firm backed by billionaire businessman Tom Golisano.
Members of the investment firm were impressed with Token’s potential.
“We have great faith in the Token team and are confident in their ability to be a leading provider of authentication and cybersecurity solutions that have incredibly great return on investment,” said David Bovenzi, Grand Oaks’ chief investment officer. “Token has a short path to revenue and then rapidly scaling the business, and cybersecurity has always been a recession-proof business.”
Token’s initial production run will be at another Grand Oaks-backed business – Viridi Parente, which makes lithium-ion battery systems in Buffalo. Full-scale production will ultimately be done at a facility in California, Gunn said.
Token’s headquarters, however, will remain in the Rochester area, he said, noting the firm has deep connections here, especially to Rochester Institute of Technology.
The firm’s technology was developed by RIT graduates Steve and Melanie Shapiro.
In addition, Gunn added that the business also looks to RIT for recruiting – for both hires and co-op opportunities – and plans to explore opportunities with , RIT’s ESL Global Cybersecurity Institute.
“We’re very lucky to have – and be able to draw from – such a distinguished major university here,” he said.
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