Startup of the Week / WatchDox Keeps File-sharing Safe

This startup provides a secure file-sharing platform that works on any device and is designed specifically for businesses.

The growing use of mobile devices over the past few years is posing a new kind of challenges for businesses. Employees bring their own smartphones and tablets to work and use them on the job to do things like read emails. While this helps companies reduce operating costs, it also creates a security problem.

In the past, company information - often sensitive and secret - was kept on secured personal computers on company premises. But the BYOD (bring your own device) trend means such information now flows freely outside businesses on devices that could easily be stolen or used by children.

Enter the Israeli company WatchDox, which deals with the security challenges of the brave new world of mobile devices and the cloud.

WatchDox has created a file-sharing system that is similar to the file-sharing platform Dropbox, but secured and for businesses. The system allows businesses to customize which users can fully or partially access, edit or share documents with other users. Documents are encrypted so that they cannot be accessed without authorization.

WatchDox was established in 2008 by Moti Rafalin and Noam Livnat under the name Confidela. One of the company’s first investors was Shlomo Kramer, the co-founder of Check Point Software Technologies and now the chairman of WatchDox’s board of directors.

Over the past year, WatchDox has grown rapidly, doubling its staff to 100 people, who are split between a development center in Israel and the United States. WatchDox recently opened sales outlets in London, Paris and Munich and signed a contract with the Japanese company NTT, which sells a version of the product adapted for the Japanese market.

A total of 500 companies use WatchDox’s product, including Coca-Cola, Nike and Chevron — companies with hundreds of thousands of users. User licenses costs $15 per month each, with discounts for companies that buy thousands of them.

WatchDox’s market-infiltration strategy is to focus on executives. “Our business model is land and expand — first of all, to sell to the level of management that wants access to the documents, the ability to share them and the option of working on them using mobile devices and then sending them throughout the company,” says Rafalin.

WatchDox continues to develop its product and adapt it to the market’s changing demands. Last December, it bought the Israeli startup InstallFree, which made mobile applications, remote working options and access solutions. Thanks to the acquisition, WatchDox now offers its users the option of editing Microsoft Office documents on any mobile operating system including iOS, Blackberry and Android. It also allows several users to edit a single document at the same time and see the changes in real time.

“The purpose of buying InstallFree was to expand the ability to make the product more usable, convenient and rich,” says Rafalin. “Our goal is to enable the sharing of information on all devices. Security is an enabling technology; without it, there can be no sharing capability.”

In the future, WatchDox plans to expand the platforms it supports, to include Windows Phone for example, and the options available to users.

So far, WatchDox has raised $35 million, including $12 million last January. Its investors include Blackstone, Shasta Ventures of Silicon Valley, Gemini Israel Ventures and Millennium Technology Value Partners, which invested in Facebook and Twitter in the past.

Nir Kedar