Startup success in Mexico
Waterloo firm provides secure, wireless access at remote sites
WATERLOO — When David Coode joined a startup that was making money, hiring staff and expanding its customer base in Latin America, one of his top priorities was changing the name.
The startup, founded in 2014 as LockedUp, rebranded as Sera4 a few weeks ago. The original name was difficult to pronounce in Spanish, which wasn’t good for a business that was focused on Mexico and Latin America. Also, weird websites popped up in Google searches using the original name.
“So it was a bit of a dangerous name space,” said Coode, chief executive officer of the startup that specializes in secure wireless control.
The new name is a hybrid of the Latin word for lock — sera — and a term from software development — semaphore. A semaphore is a variable that’s changed to control access to common resources in the system.
The new name fits nicely with Sera4’s product Teleporte, which provides secure, wireless access to sites that are scattered across a large area.
Sera4’s main customers are Mexico’s top mobile telecommunications companies that have thousands of cell towers around the country that require routine maintenance.
The startup’s Teleporte platform allows a company to control and track who gets into locked sites. Workers download the app to their smartphone and unlock secured sites with a tap on the screen.
“What we are selling are apps that work on any phone, a server that manages everything in the background, and the whole thing that solves a problem for our customers,” said Coode.
Managers can track in real time who, when and where locks are opened, and for how long. The Sera4 platform allows a company to monitor locks anywhere in the world.
Telecommunications companies typically lease cell towers from tower owners. Both businesses have workers that need regular access to the sites and towers.
Previously, thousands of keys were made and shared all across Mexico. With so many keys in circulation, thieves after copper, batteries and electronics have little or no fear of getting caught, said Coode
“The important thing to understand is the theft and vandalism, the majority, sometimes 90 per cent, is caused by trusted sources,” he said.
The startup partners with original equipment manufacturers in the U.S. that make the physical locks for doors, cabinets, boxes or just about anything that needs to be secured. Sera4’s team in Waterloo concentrates on the software.
Unlike many startups in Waterloo Region, Sera4 was profitable from the outset; it did not need outside investors. Unlike many local startups, it focused on foreign markets first.
In addition to its Mexican customers, Sera4 has trials underway in six other countries in Latin America.
Sera4 believes there is a greater demand for security solutions in developing countries because widespread poverty makes them more prone to theft.
“Developing countries feel this pain the worst,” said Coode.
When Coode joined the startup last October, it had three employees who were working in small office on Albert Street. Today, the startup has nine employees and is moving into offices containing 4,000 square feet of space on Bridge Street.
The startup expects to have about 40 people on staff within two years. Only after it secures markets in Mexico and Latin America will it turn its attention to Canada and the U.S. “There is a lot of opportunity for this,” said Coode.
Sera4 was founded by Jerod Klink, a former BlackBerry engineer, in April 2014. Klink, Sera4’s chief technology officer, built Teleporte using 192-bit elliptical curve cryptography — the same digital foundation BlackBerry used for the vaunted security of its smartphones.
That combined with Bluetooth technology makes the digital keys in Teleporte very secure, said Coode.
“We have about 10,000 of these deployed right now, and so far they haven’t been hacked,” said Coode.
The smartphone must be close to the lock to work because it uses Bluetooth technology.
“We chose to stay with the Bluetooth link because it is something we know exactly how to secure,” said Coode.
With Bluetooth technology, there is no IP address hackers can exploit, he said.
Sera4 gleaned important lessons from the massive hack at the Target department store chain when thieves stole person information for 80 million credit cards.
“They found a security hole in the air conditioner, and got into a microcontroller within the air conditioning system,” said Coode. “They got through the gateway, then found the records, pulled them, and transmitted them out through the air-conditioner.”
The microcontroller in Target’s air conditioning system had an IP address. The Teleporte-enabled smartphones and locks do not, Coode said.
“If this is IP-addressable, some smart person somewhere in the world is going to figure out, at best, how to open it when they shouldn’t open it,” he said.