Cybersecurity vendor Cavelo rides explosive growth in MSP platform to new funding round

Cavelo makes a platform that provides attack surface management technology for MSPs to identify and protect sensitive data.

James Mignacca, Founder and CEO at Cavelo

Kitchener ON-based attack surface management technology provider Cavelo has announced it has secured CAD$5M in venture capital financing led by Inovia Capital, a Canadian venture capital firm supporting founders who build global sustainable tech companies, with participation from existing investors including Graphite Ventures. The investment will support continued platform development, and sales and marketing efforts to meet growing customer demand across North America. The new funding comes on the heels of very rapid sales growth, with year-over-year annual recurring revenue up by 272%. Cavelo also grew its new customer acquisition two-fold over the same period.

“I did an angel round for 1.2 million, but with COVID at the time, it was harder to pull in,” said James Mignacca, Founder and CEO at Cavelo. “It still wound up at $3 million. That allowed us to build the product. We then had the seed round of $5 million, all of which went to fund growth and Go-to-Market.

“My last company was Root Secure, which was sold to Arctic Wolf,” Mignacca said “It made vulnerability management software, but when I talked with MSPs about important issues to them, they said that compliance was a big driver. The key piece I honed in on was being able to find the  sensitive data companies are trying to protect – PII  [Personally Identifiable Information] which they want to protect from  a data breach. We built a platform because companies want to consolidate their tech stack, and get one that is tailored for MSPs. We ran an MSP 10 years ago, so we knew how to do that.

“We have a platform that is tailored to MSPs, while our competitors sell a service,” he added. “We consolidate the technology stack at a better price point.”

Mignacca said the precise term for that Cavelo does is CAAASM [Cyber Asset Attack Surface Management.

“Our platform is based on the premise that if you don’t know what’s important to you, how do you protect it,” he stated. “The Cavelo platform is a turnkey product that allows customers and channel partners to identify sensitive data, where it resides, who has access to it, and where software vulnerability remediation efforts should be focused, ultimately mitigating risk and exposure.”

Cavelo’s focus is on the SMB market, and Mignacca said that for now, that will remain their focus.

“The market that we are in now is so large,” he noted. “SMBs have the same regulatory requirements as large businesses. “Later, we might decide to go upmarket.”

Cavelo was an entry-level sponsor at the recent IT Connect event in Orlando.

“This is a good event,” Mignacca said. “It is the first time that we are here with a booth. Next year we will get a bigger booth. We tie in with the ConnectWise PSA platform, and we have other connectors as well, with 15 cloud connectors and three PSAs in total.”

“Visitors to our booth asked us how easy we are to deploy, how many integrations we have in our ecosystem, and most importantly, how they make money,” said Kris Shoemaker, Cavelo’s head of channel sales.

“Some of our MSPs mark us up to 150% and we are good with that,” Mignacca stated. “They should make the money.”

Cavelo launched their first channel program in April 2022.

“About half of our business now is channel,” Mignacca said. “By the end of next year we want that to be 80% channel. We are all in on the channel.”

Going forward, Mignacca said that Cavelo will be attending more shows like IT Connect.

“In the new year, we will also be launching our MSP community, so that we can be a thought leader,” he added.