Areto Labs secures $1 million to address online abuse with machine learning

Areto Labs aims to help sports teams protect star athletes from social media trolls.

Edmonton-based Areto Labs is a B2B cybersecurity software startup that detects and counteracts online abuse with automated alerts and actions.

By helping companies protect their workers from hate and other forms of targeted harassment on social media, Areto Labs hopes to help reduce business liability, boost talent retention, and increase brand value.

“We see this problem in a huge way across lots of different areas.”
-Lana Cuthbertson

“What our technology does is help organizations address the risks that come to their business with the presence of online toxicity directed towards their spokespeople, brand ambassadors, or employees,” Areto Labs co-founder and CEO Lana Cuthbertson told BetaKit in an interview.

After spending a year and a half developing its online abuse detection and remediation solution and working with initial customers, Areto Labs has closed its first round of venture financing. The social enterprise startup has raised $1 million CAD in pre-seed funding to bring its solution to more sports teams and organizations—the company’s first major target market.

“One of our customers, a major sports organization, dealt with a major mental health incident due to online hate and abuse that one of their athletes experienced,” said Cutherbertson. “One of the reasons they are working with us is to put something in place to prevent [this] from happening again [and] be there for that person on behalf of their business.”

Areto Labs helps companies identify and monitor online abuse, and address instances of it through automated counteractions like muting, blocking, and reporting accounts responsible for spreading it. The startup’s software does this by leveraging machine learning (ML) technologies like sentiment analysis and natural language processing.

The company’s pre-sound round, which was raised via SAFE, was led by Alberta’s Accelerate Fund III, with participation from the Telus-backed ScaleGood Fund, Calgary-based The51, University of Calgary’s UCeed Social Impact Fund, and undisclosed angel investors. In addition to this $1 million, Areto Labs is also hoping to secure another $500,000.

Areto Labs plans to use the proceeds to grow its product team, invest in research and development, and expand its sales to sports teams and organizations across Canada and Europe.

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The startup was founded in 2020 by Cuthbertson, COO Kasey Machin, and CPO Jacqueline Comer, who teamed up after seeing the impact of online abuse on the workplace.

“Areto Labs started out of my previous career in product and tech in the banking industry and combined with my volunteer work—along with my co-founder, Kasey—in gender equality and politics,” said Cuthbertson. “We had noticed the problem of online abuse and toxicity really having an impact on the workplace, and on people’s jobs, and that always has an impact on organizations.”

Yasmine Al-Hussein, an investment analyst at Accelerate Fund II and III, highlighted that online abuse has had “a dramatic and costly impact on audience engagement.”

“Areto Labs has demonstrated strong market uptake from sports brands and organizations seeking to create equitable online communities to boost participation,” said Yasmine Al-Hussein, an investment analyst at Accelerate Fund II and III.

The broader content moderation space that Areto Labs operates in also features early-stage players like Las Vegas-based Block Party, which is building consumer tools to address online safety and stave off harassment from social media trolls.

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It also houses companies like Kelowna’s Two Hat and Palo Alto-based Sentropy, which were each acquired last year by Microsoft and Discord, respectively, to moderate content on their own social media platforms.

For sports brands, while helping protect the health and well-being of athletes is obviously the right thing to do, Cuthberston added that the business ramifications of not doing so can be “huge.”

“There’s significant brand value impact and there are significant legal risks and liabilities that organizations found to be negligent in failing to protect their people in basically what has become their workplace, which is, more and more these days, social media platforms for people who have some kind of public-facing role,” said Cuthbertson.

To date, Areto Labs has generated interest from the sports industry, a space Cuthbertson said has “a lot of different players and lots of interest … and [a] really deep understanding of the value of a positive online social community.”

At the same time, she sees plenty of room to grow elsewhere. “We see this problem in a huge way across lots of different areas,” said Cuthbertson.

Feature image courtesy Areto Labs.

Josh Scott

Josh Scott

Josh Scott is a BetaKit staff writer who loves to tell Canadian business and tech stories. His coverage is more complete than his moustache.

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