The mobile security software market is expected to hit $1 billion by 2006, according to research firm IDC. Perhaps that’s why JK&B Capital led a $6 million round for Bluefire Security Technologies Inc., a Baltimore-based company focused on security for mobile and handheld devices.
Walker Ventures, an early-stage fund that invests seed money into growing companies, and The Maryland Department of Business and Economic Development also participated in the Series B round. Founded in early 2001, Bluefire’s first round of venture financing came from Walker Ventures, which put $1 million into the startup. Mark Komisky, the company’s president and CEO, describes this round as a significant up round from its first.
The proceeds from the deal will be used to expand business operations and commercialize the company’s mobile firewall for handheld devices, which is currently patent-pending. Bluefire is releasing its first product Nov. 15 and expects to be profitable shortly thereafter. Currently, the company’s product is in trials with large government agencies and will be commercialized in the first quarter of next year, says Komisky. “We have 20 employees right now and will be adding more over the next 18 months in sales and business development,” he says.
Bluefire was initially looking for $3 million but took double because Komisky felt it increased the company’s likelihood of success. “It gives us more runway and more room to grow,” he says.
Going forward, it is unclear whether Bluefire will need to head back to the venture markets again. “I think there are a number of opportunities. Given the interest from vendors, we may go for a strategic investment, but we may also have the opportunity to raise another round with venture capital. We are making headway now and given market conditions and timing, there may be other options as well,” says Komisky.
If Bluefire secures any of the customers it has set it sites on, then any exit would probably work for the company. “A lot of our focus is on large market transportation and financial services. FedEx, UPS and Pepsi are all using unsecured wireless technology now,” says Komisky. “The solution applies across large areas and in post-Sept. 11 times, it’s time to secure the devices. We really are providing a huge value. There are a number of Pentagon releases talking about these issues. Hackers are a concern.”
With products and a few customers in place, Bluefire’s biggest challenge is the market uptick. “The economy as a whole is a problem and spending is down, but devices need to be secure. It is the last gaping hole, and you will see that securing wireless devices will really be critical in the future,” says Komisky.
Contact Danielle Fugazy