Could this be the start of Europe's own Silicon Valley?

Cybersecurity incubator CyLon aims to create a fertile breeding ground for tech firms on this side of the Atlantic. We find out more

When Don Hoefler, reporter at Electronic News, first coined the term "Silicon Valley'" in 1971, no one quite knew just how significant those two words would become for the technology industry. Yet, in 1953, when Frederick Terman, professor at Stanford University, permitted two budding alumni, William Hewlett and David Packard, to set up shop in Stanford Research Park, so began the tale of the global dominance of the US technology industry that is still resounding today.

The 30x10-mile strip, stretching from the south end of San Francisco Bay to San Jose, has become synonymous with America's technology titans, including Google, SAP, Apple, Cisco and Intel; so much so that Robert Metcalfe, founder of 3Com, wrote in Info World in 1998: "Silicon Valley is the only place on Earth not trying to figure out how to become Silicon Valley."

Although Europe has produced a handful of technological heavyweights to rival the US, such as Spotify and Skype, it is difficult to deny that the looming US giants have cast a large, daunting shadow over ambitious bright-eyed entrepreneurs striving to launch the next big thing in the tech industry outside Silicon Valley. Cyber London's (CyLon) second wave of talented cohorts, however, plan to change all that.

Claiming to be Europe's first cybersecurity start-up incubator, CyLon aims to put the next generation of entrepreneurs through their paces with a 14-week programme in which new recruits are offered training, mentoring, and free office space. The programme culminates in a demo day, allowing the participants to pitch their product to a jam-packed room of investors looking for the next IT success story.

The incubator gives each participating business a £15,000 investment for a three per cent equity stake in each start-up. Last spring marked the programme's debut, putting six start-ups through the mill before facing a 120-strong audience of investors to pitch their products.
Based in Hammersmith, London, CyLon hopes to establish a thriving European technology hub and to develop talent from beyond the west coast of the US.

Kirsten Connell, managing director of CyLon, said: "We really hope this secures the UK as a hub for the industry. We think we really have a chance to help set up European companies to become big players on this side of the Atlantic. It is hard for a new start-up to move to the US where they have to compete with so much noise. London is a central playing ground in the industry and the best launchpad for the rest of Europe."

Investor insight

Having taken in the start-ups' pitches, the crowd of investors at the CyLon demo day had the opportunity to meet the talent behind the products, ask questions and learn more about what each company hopes to achieve. One such investor, Tom Britton, co-founder and CTO of equity crowdfunding group Syndicate Room, said the pitches from Ukkobox and Fabric piqued his interest most.

"I think with all the security breaches you hear about in the news, these kind of products are really interesting right now. People are worried about their data being lost and they don't trust larger companies such as Dropbox and Google to keep their information safe. A lot of smaller companies do not have a secure storage network and are still relying on platforms like Dropbox which can leave your data very vulnerable."

Connell added that since graduating from the programme, last year's entrepreneurs have generally been successful, and are still growing today.
She explained: "One company folded from the first cohort, and that was a hardware firm. Since then we decided to move away from hardware start-ups and concentrate on software. The other five start-ups from last year have all either doubled or tripled their workforce and are still going strong.

"The companies that don't make it help the other teams. It is a good networking opportunity and has long-term value. On top of that, the second cohort gets to meet the first one and learn from them and discuss their progress."

The second round of start-ups embarked on CyLon's programme in December and faced an even larger 150-strong crowd of investors on 10 March. According to Connell, most entrepreneurs are hoping to take away £200,000 to £300,000 worth of investment from the demo day.
Flocking to London from across Europe, the Middle East and South Africa, founders of Aves Netsec, BitNinja, Fabric, Mazor, Ordach, Torsion, Ukkobox and Verity all stepped onto the stage to give their three-minute pitches to a packed room of investors, public sector representatives, and the wider business community.

Applications for CyLon's third round of recruits closed on 27 March, and the next programme is set to begin on 3 May with another round of talent.
CyLon's Connell said the programme can take on up to 10 participating companies, but that it had no plans to expand the number of recruits, explaining that it was more about quality rather than quantity.

"If they want to be successful in Europe, they have to move to London," Connell concluded.

Time will tell if her dream of creating a European CyLon Valley in the UK capital will become a reality.

Company profile: Ukkobox and FabricUkkobox offers a storage platform that spreads data across several cloud networks in order to enable safe online storage, while Fabric boasts an encrypted communication service to keep telephone conversations secure.
Paul Ngnum, CEO of Ukkobox, said that his business will target SMEs and will look to take on 500 users after launching the beta version of the product in June. Looking for a £300,000 investment, Ngnum hopes to employ developers in Brazil to develop the product further.
Fabric's founders, meanwhile, claim that the company is "at revenue", with initial customers paying for its beta version and a "strong pipeline" of opportunities. CTO Paul Manister said the company has already secured £400,000 but was looking for another £200,000 through the demo day.The CTO said Fabric has so far proved that there is a market for its product on iPhones and iPads, but aims to use the funding to adapt its service for the Android market. Manister also said the company is currently using overseas developers, but is looking to hire from within the UK instead in the future.

CyLon at a glance

* 8 start-ups in second CyLon cohort

* 150 investors attended the demo day

* Start-ups are typically looking for £200,000 to £300,000 in investment

* CyLon invests £15,000 in each start-up

* CyLon has an equity stake of 3% in each start-up

Company profile: Aves NetsecHailing from Finland, CEO Simo Kohonen and CMTO Teemu Halme of Aves Netsec used the CyLon demo day to pitch a product that aims to bait cybercriminals inside users' networks by using decoys, in order to learn from the attacker before capturing them.
"We want to open an office here for market opportunity, but we also want to be in offices in Finland," said Kohonen.
"We are developing our first product at the moment; right now it is a very raw prototype but it should be finished in the next year. After that, we will go back to the drawing board and then hopefully target the financial market. They have a sophisticated security architecture in place that would really benefit from our software."We are looking for a £250,000 investment which will build us a commercially ready product and allow us to hire four to six additional developers. This funding is expected to last 18 months and then we will think about looking for more."

Company profile: VerityAnother member of CyLon's second cohort, Verity, pitched a certification service to prevent digital documents being forged.
Rhett Trickett, CEO of Verity, said: "We learned from here that we have to create for ourselves a target audience. We want to create a niche first and we are hearing a lot of interest from some smaller banks."Trickett said Verity was looking for a £200,000 investment to help set up offices and recruit a sales team who can shift its product, and will likely search for more investment in a few years. He said that Verity's future business model will be to work exclusively through channel partnerships.