From Australia to San Jose

Silicon Valley entrant Dtex Systems lands $15M to stop insider data leaks

It’s not everyday that a 15-year old company grabs a series A funding round. However, in the case of Dtex Systems, which plans to announce Wednesday that it took in a $15 million one, it makes sense. The company — formerly based in Australia and now in San Jose — will be needing that capital and an investment team to grow in the U.S. enterprise security market, explained Dtex Systems CEO Mohan Koo in an interview.

Dtex Systems hawks a security tool that can be installed in a company’s data centers. Most of its clients are on-premise, but Dtex can also be used for the cloud, Koo said. The tool contains a centralized management plane that distributes software-based micro agents throughout the network that record all user activity in its system.

Once the software agents log all that user-activity data, organizations should have a full audit trail on what every employee is doing. Dtex Systems’s data scientists can then crunch that data with their algorithms to detect anomalies that may indicate whether an employee is up to no good.

Dtex human analytics
Dtex human analytics

For example, Dtex Systems’s data science team has apparently learned from the information its gleaning that people who resign from their jobs behave differently during their last days of employment when it comes to how they access their organization’s applications or tools, Koo said. Using the Dtex tool, companies should be able to see this sort of atypical behavior and could prevent employees from stealing confidential data with them when they take off, he said.

“We built a library of 330 different behavioral events which lead to a security breach, and we can use those for customers,” said Koo.

This Silicon Valley newcomer (it opened its San Jose office a month ago) claims that the years it spent working with Asian and European companies to protect their data centers with threat-detection software gives it a leg up to other likeminded security companies, especially when it comes to privacy concerns, said Koo.

To work with companies in Germany and Spain who must comply under European privacy laws, Dtex Systems had to come up with a way to anonymize all that data, and it does so by separating the user-activity data from the names of employees, which get stored in an encrypted table with nondescript names like “user 1” or “user 2.” Companies run the Dtex tool to spot unusual employee behavior in the user-activity data, and if they find something that seems like a breach, “they can request the ID for a forensic investigation” and get to the bottom of the problem, said Koo.

Norwest Venture Partners and Wing Venture Partners drove the investment round with Wing Venture Partners’ founding partner Gaurav Garg joining the startup’s board along with Norwest Venture Partners’ senior managing partner Promod Haque.