Aussie start-up says it can be next Wiz and become a $150m company after partnering with Google

Cocoon Data is on its way to $152m in revenue after signing a deal with Google and gaining US government accreditation, allowing it to crack the world’s biggest and toughest market.

Cocoon founder and CEO Trent Telford (far left) with his team at Google's office.

Australian tech minnow Cocoon Data says it’s poised to become a $US100m ($152.4m) business after signing a partnership with Google and gaining accreditation from the US government to gain access to public sector customers in the world’s biggest economy.

Cocoon has developed software, dubbed SafeShare, which is an encrypted file-sharing platform targeted at businesses and governments. It says its Google deal and US government authorisation have given it the potential to become the next Wiz, a cybersecurity start-up that generates $US500m in annual recurring revenue and was subject of a failed $US23bn takeover bid from Google.

Under its Google partnership, Cocoon will make Google Docs more secure, delivering an encryption service – called KBOSS Add-on for Google Workspace – for users on the tech titan’s cloud suite.

Cocoon founder and CEO Trent Telford.

It also secured approval for the US government’s FedRAMP (Federal Risk and Authorisation Management Program). This means its software meets the rigorous security standards to supply US federal agencies and the Defence Industrial Base.

Chief executive and founder Trent Telford said this paves the way for the company to enter a market worth tens of millions of dollars a year, with little marketing outlay from Cocoon. Its add-on is sold by a subscription per user, costing $US20 a month.

“In the Google public sector – in that federal space – you’ve got 300,000 organisations that need to be compliant in the next 18 months for what’s called CMMC, Cybersecurity Maturity Model Certification. It is the Pentagon coming out saying ‘the bad guys, bad actors have worked out it’s easier to hack the supply chain of US Defence than the Pentagon’,” Mr Telford said.

“There are about eight million users within those 300,000 organisations. If we get 5 per cent, that would be 400,000 users, because we are tagging on the back of Google, who are focused in this area. But even if we get 2.5 per cent, 200,000 users – at $US20 a month, that’s $US4m a month and a $US50m business.”

The enterprise market is also lucrative. It sells subscriptions to businesses at $US10 a month, and its partnership with Google allows it to access its 500 million customers using Workspace.

“That’s existing paid users of Google Workspace – not free Gmail and all that. And look, if we can get 0.1 per cent of that market, that’s still 500,000 users at $US10 a month, which is a $US5m business.

“So we think there’s comfortably a $50m-$100m business here with our partnership with Google over the next three years.”

Cocoon has had some big names behind it, with its advisory board including former defence industry minister Christopher Pyne and former Virginia Governor Terry McAuliffe. Other board members have included Jack Gumtow, the former CIO of the US Defence Intelligence Agency, as well as Robert Rodriguez, the founder and CEO of Sinet Executive and former special agent of the US Presidential Secret Service.

This helped it target US defence supply contractors.

In late 2021, it secured an oversubscribed $5m funding round. Mr Telford is now planning a further raise of about $US20m, buoyed by an increased focus in the sector, including Google parent Alphabet’s bid to acquire cybersecurity start-up Wiz for about $US23bn, which later fell apart but if proceeded would have been the tech giant’s biggest acquisition.

“Obviously with what happened with Wiz, every VC now wants to work out how to be involved in the next Wiz in terms of API security,” Mr Telford said.

“We have proven we can execute and put a flag down in the US in arguably the hardest market, which the US Federal is. As one VC said, ‘if you build a Rolls-Royce and deliver a Rolls-Royce, you can rebadge it as a Mercedes or a Chevrolet’. You can’t go the other way.

“So moving into enterprise, health care, banking and finance, once you’ve got the Department of Defence and government and the Defence Industrial Base, is a lot easier.”

Originally published as Aussie start-up says it can be next Wiz and become a $150m company after partnering with Google