The possibility of solving a $3.7-trillion global problem was too good to pass up for the judges at TieCon Canada 2015’s Pitch Fest last Friday.
Ottawa-based startup Squanto took home the top prize of $25,000 in cash and more than $100,000 worth of in-kind services after the event that many consider to be the highlight of the TiECon Canada conference.
Squanto tackles occupational fraud, which founder and CEO Solon Angel said costs the global economy $3.7 trillion a year.
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“That’s the known cases. I can assure you, there is more than triple that that we don’t know because it is not reported,” he said.
Mr. Angel told the story of “Joleen,” a sweet woman who everyone loved at the trucking company where she worked in the southern United States. “Joleen” was the office manager who, without anyone knowing, would add her husband to the payroll before payday and delete him two days after, stealing $100,000 a year before she was caught.
“It’s always the nicest people with excellent reputations,” Mr. Angel said.
The current systems in place to fight occupational fraud are completely ineffective, he said, adding that 40 per cent of cases are solved by luck.
“Someone that doesn’t show up to the office anymore and someone says, ‘Why doesn’t he show up at the office anymore?’ Oh, he’s in the Bahamas,” Mr. Angel said, drawing laughs on the serious topic.
Squanto vows to fix the problem with what Mr. Angel called a new approach to fraud investigation using data science.
By tapping into existing data structures and analytics, Mr. Angel told the judges Squanto builds a real-time HR screening tool.
“The moment someone walks in, we look at behaviour, we look at their activity levels,” he said, adding it is much more effective than the one-time HR screening process new recruits go through now.
An employee who breezes through that original process can change a lot in 10 years, he said.
When the native of France moved to Canada from San Francisco a year ago, he said he promised his wife he was finished with startups. But here he is again. His TiECon Canada Pitch Fest victory actually brings him full circle, as it was the TiECon Santa Clara event earlier this year where his company first got off the ground.
“I wrote the application … and it actually helped me define the idea, the problem, the solution, all the stuff that you do in a business plan because it was a very long application.”
Mr. Angel said he wasn’t going to send it in, but it was in fact his wife who convinced him he should, seeing as how he had spent more than two hours filling it out.
“The next thing I knew, I was on a plane to San Francisco to pitch the idea,” he said.
But his idea, which solved a real problem, and his ten years experience in the space caught investors attention. He and 2014 Pitch Fest winner Koneka were the only Ottawa startups to make the finals at the California event.
Mr. Angel said the Pitch Fest win couldn’t have come at a better time for his fledgling company, especially the in-kind part of the prize package.
“My credit card was burning … huge portion of that was to cloud providers,” he said. And while the $25,000 cash was good, the exposure Mr. Angel got at the Pitch Fest helped Squanto oversubscribe a round of seed funding that closed within 24 hours of his victory.
He is promising more details on that round in the new year, and has launched a new round of financing, seeking $750,000.
“We’re pressing on the gas and we need enough gas in the tank for that,” he said adding he wants Squanto to have a global position within two years.
TiECon Canada organizers received 31 applications for the Pitch Fest before deciding on the five finalists: Squanto, The Better Software Company, Raven Telemetry, Scent Truck and This Space Works.