Kitchener-Waterloo, Ont.-based cybersecurity startup Cavelo has closed a $5-million seed extension round led by Inovia Capital as it continues to focus on sales, marketing, and developing its product.
The new all-equity funding may come with a sense of déjà vu, as Cavelo also raised a $5-million CAD seed round led by Inovia just under two years ago to fuel expansion in the United States (US). CEO James Mignacca told BetaKit in an email statement that this week’s round, solely backed by Inovia, increased Cavelo’s undisclosed valuation. In a statement, Mignacca said Cavelo’s growth over the past year “has been nothing short of incredible.”
CEO James Mignacca said the American market remains a “core focus” for Cavelo.
“This funding fuels our continued momentum and strengthens our commitment to our partners and their success,” Mignacca said.
The company attributed the upward trajectory to its shift from a direct sales model to a new “channel-first model.”
Cavelo identified channel partners like managed service providers (MSPs) and managed security service providers (MSSPs) as a means of serving its customers prior to its 2023 seed round, and now works exclusively with them rather than making direct contact with customers. MSPs and MSSPs help companies that have cybersecurity needs, but not enough resources and talent in-house to meet them.
“By focusing on enablement, ease of deployment, and partner success, we’ve aligned our product and business model around the unique needs of the channel—and the response has been incredible,” Mignacca told BetaKit in an email statement. “It’s helped us scale faster, reach more customers and create more impact.”
Mignacca added that Cavelo secured 50 new customers with the proceeds of its 2023 seed round. Following the company’s marketing push in the US, Mignacca said the American market remains a “core focus” for Cavelo, as 70 percent of its customers are south of the border.
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“Despite broader market headwinds over the past few years—and especially in 2025—we’re continuing to grow our U.S. footprint,” Mignacca said. “Our strategy has always been to support the channel community where the need is greatest, and the U.S. market continues to be a major driver of demand for attack surface management and risk reduction solutions.”
Founded in 2020, Cavelo has built a platform that scans, identifies, classifies, and reports on data that companies might want to protect in the event of a breach, such as credit card and passport information. By helping businesses locate and determine who has access to sensitive data, it aims to simplify compliance reporting, vulnerability management, and risk mitigation. Mignacca said the company is developing new capabilities in automated remediation and artificial intelligence-powered threat detection with its new funding.
The company raised a $1.3-million pre-seed round in early 2021 led by MaRS IAF. Following the 2023 seed round, Mignacca told BetaKit that Cavelo aimed to use the capital to set itself up for a larger Series A round within two years. While Cavelo initially planned to raise a Series A by now, Mignacca told BetaKit this week that the company’s rapid growth diminished the need to raise additional capital so quickly. However, he added that a Series A is still on the horizon “when the time is right.”
Cavelo caters to businesses and organizations of all sizes and counts undisclosed financial services companies, law firms like Chaitons and WeirFoulds, and municipalities like the City of Guelph among its customers.
“Since our initial investment in Cavelo in 2023, we’ve been consistently impressed by the team’s ability to execute and deliver value-added products tailored to the needs of MSPs and MSSPs,” Inovia principal Taha Mubashir said in a statement.
UPDATE (07/29/2025): This story has been updated with commentary from Cavelo CEO James Mignacca.
Feature image courtesy Cavelo.