Custos Raises $400K to Fight Piracy with Bitcoin Bounties

Pirates beware! Stellenbosch-based anti-piracy startup, Custos Media Technologies, has made a deal with the Technology Innovation Agency (TIA) of South Africa to help it grow and bring their services to a wider market. Under the agreement, TIA will provide a funding injection of 5.9 million rand, or approximately $407,000 USD, into the startup over the next two years.

Also read: EU Intellectual Property Office: Bitcoin Hinders Anti-Piracy Efforts

Custos Combating Software Piracy

Custos first announced their plan in July 2015 to fight copyrighted movie piracy online by “turning downloaders against the uploaders,” through a series of bitcoin bounties. The creative strategy calls for their team to embed notices for these bounties, as watermarks, within videos and movies before they are shared by the studio. As the movie first arrives on a torrent site, the first downloader will be incentivized monetarily to “rat out” the uploader.

Deploying the service is simple. When Custos-enhanced media leaves the original studio for any number of reasons, its creators can track down all copies pirated from the original by using Custos’ free tool. On top of stopping the outbreak among the BitTorrent network, the service can even help stop the leak at its source by identifying the copy that was shared and noting the timestamp of the first sharing.

The Funding Agreement

Created by an act of the South African Parliament on November 24, 2008, TIA is an initiative of the Department of Science & Technology (DST).

GJ van Rooyen, the CEO of Custos said in a recent statement:

“TIA has again shown their commitment to support early-stage technology businesses in South Africa. The funding agreement will allow Custos to accelerate product development, while simultaneously freeing up resources to spend on bringing the product to the widest possible market.”

Custos’ COO, Fred Lutz, confirmed in a statement how TIA funds will be used, saying that “the TIA deal allows us to immediately grow our team,” and added that “their funding specifically supports technical development, and that is where we need to focus now.”

This is the third time that Custos has secured funding. Earlier this year, the company concluded a round of financing with investors including Innovus Technology Transfer — which is owned by Stellenbosch University — New York’s Digital Currency Group, and a South African angel investor.

12 Million Rand in Funding

To date, the company has acquired 12 rand million in funds. TIA has already invested in the company once, providing 500,000 rand in seed funding, making their 5.9 million rand contribution the second time they have funded Custos.

“We are fortunate to have raised close to R12m for Custos to date, most of it from local investors,” Van Rooyen commented. “The founding shareholders still own more than 73% of the business, which allows us to apply our available capital to the original vision – keeping creative industries sustainable in an era where almost all distribution channels are becoming digital.”

How effective do you think Custos’ bounties will be? Please let us know in the comment section below.

Images courtesy of Shutterstock, Custos, TIA.