Sypherlink products, ambitions take data-mining firm to New York

Kevin Kemper — Columbus Business First

November 30, 2007 

Capping off a busy year, Dublin-based Sypherlink Inc. is expanding to New York. Sypherlink, which specializes in software that helps mine databases, has signed an agreement with Polytechnic University to open an office at the engineering school’s business incubator.

The accord puts Sypherlink in close proximity to one of the world’s largest marketplaces, while giving Polytechnic students the chance to work on advanced computing programs.

"(Polytechnic is) strategically positioned there in Brooklyn and a lot of companies we want to go after are in New York," said Sypherlink CEO James Paat. "At the same time, we’re looking for access to resources for sales and marketing that Polytechnic can provide."

Polytechnic University is the nation’s second-oldest private engineering school.

M&A CENTRAL

Sypherlink has set up a team of a dozen Polytechnic master’s and doctoral students, along with a project manager, as contractors at the school’s Brooklyn Enterprise on Science & Technology and Technology Transfer Center.

The center is a business incubator that has been working to attract a variety of startup companies to Brooklyn, said Bruce Niswander, the center’s director.

"About two years ago, the university (identified) the need to be more entrepreneurial," Niswander said. "We’re trying to put together a scalable model that will truly begin to do economic development across the board and create jobs for students, grad students and doctoral students."

Under the agreement, Sypherlink pays below-market rent for its space and offers below-market pay to the students. The center helps Sypherlink close deals in the area and in exchange receives between 3 percent and 15 percent of contract revenue.

Sypherlink joins 12 other companies at the center, all of which have similar agreements with the university.

The company is going to concentrate on landing more private-sector contracts next year, and much of that activity will be centered out of New York, said Paat, the company’s founder.

Sypherlink’s products allow customers to access and merge data from multiple databases without going through a complete conversion.

During most of the past year, Sypherlink has been concentrating its efforts on law enforcement, where local, state and national agencies use a variety of programs yet still need to access each other’s data. But that same technology can prove valuable to large corporations that are going through a merger or acquisition, Paat said, which is why Sypherlink is expanding in New York where M&A activity is centered.

A New York operation also gives the company a chance to pursue business throughout the Northeast.

MARKET EXPANSION

The expansion comes after an already full year for the company. Sypherlink in August received a $3.5 million venture capital infusion from Stuart Mill Venture Partners and Battelle Ventures, the VC arm of Columbus based Battelle.

Paat would not disclose the company’s annual revenue.

Sypherlink also introduced two products this year.

One is an integration tool kit that opens access for local law enforcement to the FBI’s national data exchange, and the other is a program that enables accelerated data sharing between government agencies.

The company also hired Clark Woodford, former vice president of enterprise e-business at Columbus-based Sterling Commerce Inc. to become its vice president of enterprise sales.

And it brought on Matt Mayer, a former attorney with the U.S. Department of Homeland Security, to run the company’s national security practice.

Sypherlink’s national security practice should also benefit from its location at the incubator, Paat said, because many government agencies are found in metropolitan New York.

Sypherlink’s time with the university is limited. The company, like all tenants at the incubator center, are expected to find their own space after they get a firmer grip on the market.

"My objective is to get the companies to outgrow the incubator in two years," Niswander said.