Magnet Forensics has opened a bureau in Australia, as the Waterloo, Ont.-based cybersecurity and digital-forensics firm continues to expand its workforce and pursue buying opportunities amid a market downturn that has roiled the tech sector. 

The Australian advantage: In an interview with The Logic, Magnet CEO and BlackBerry alum Adam Belsher said large cybersecurity investments by the Australian government were part of the country’s appeal. In 2020, it committed to spend $1.5 billion over 10 years on its cybersecurity strategy, which involves incentivizing industries to protect themselves and customers against attacks. The country also has new laws in the works that will require companies to report information about attacks to the government. “That’s been a tailwind for us,” said Belsher. “We are starting to see companies and even government agencies that are saying, ‘We’re going to have to report if we have some kind of data breach. How do we do that? How do we have the capabilities?’ And that’s where digital forensics comes in.” 

While Magnet has had clients in Australia since 2011, Belsher said having a physical presence in the country will allow it to expand services that require people on the ground to provide sales and customer support.

Bucking the trend: Magnet’s stock price is up about 50 per cent from its April 2021 IPO. That’s an anomaly among recently listed tech companies in Canada, many of which got pulled into the market tailspin shortly after going public. While other high-profile Canadian tech firms, including Clearco, Shopify and Hootsuite, announce layoffs and other cash-saving measures, Magnet is investing in its growth, “albeit prudently,” according to a recent note from Canaccord analysts. The company’s workforce has grown from about 270 employees at the end of 2020 to more than 400 as of January. Belsher said the company plans to have 500 employees by year’s end. It’s also eyeing acquisitions. “We have a pretty good pipeline of potential targets that we’re talking to now,” said Belsher. 

Driving the growth: The company has benefited from unrelenting cyber attacks and the growing backlog of police case work that Magnet says its technology can help tackle. The average number of weekly attacks on organizations around the world in the second quarter of the year was up 32 per cent since 2021, according to cybersecurity firm Check Point Software, and ransomware was up 59 per cent. Magnet has tools to investigate attacks and trace them back to their source as well as to help law enforcement retrieve and analyze digital evidence. “As good as some of these other companies are on the protection and the prevention side, the reality is there’s really no such thing as 100 per cent breach prevention,” said Belsher. “We’re seeing more and more companies investing in digital-forensics and incident-response technologies and people.” 

A measured approach: Favourable market conditions aside, Belsher said the 11-year-old company’s culture of slow and measured expansion is in part why it has continued growing through the downturn. “We were bootstrapped right until our IPO last year on the TSX,” he said. “We haven’t had to go out and raise venture capital or private equity. A lot of our DNA, frankly, is [balancing] revenue growth and profit.” Belsher said the firm has applied that slow-and-steady approach to hiring across its workforce, including its satellite teams. It expanded to Halifax and Calgary last year, with three people in each city, and has since grown those teams to about 10 each. He expects the same kind of organic growth in Australia.