Take network security software developed by encryption guru Taher Elgamal with a stamp of approval from corporate security provider Kroll Inc. Put it together with a healthy client list that includes financial institutions and government agencies and you have Securify Inc.
Last week, the Menlo Park, Calif.-based maker of network security software scored a $13 million Series B financing. The round was led by Benchmark Capital Partner David Beirne.
AltoTech Ventures joined the round as a new investor in a deal that included Series A investors Bayview Capital Group, Pequot Capital Management and Spectrum Equity Investors alongside strategic investors Gemplus International, Internet Security Systems and Kroll Inc.
Founded as a security consulting firm in 1998 by Chief Technology Officer Elgamal and his team, Securify began developing software soon after signing its first clients in order to offer them a more complete network security package. Then, in 1999, the company was acquired by Kroll, the New York-based security and investigations firm, but was spun-out again as an independent entity in 2001 with $30 million of venture backing from Pequot and Spectrum. While the move accelerated the development of the company’s software and managed security services, its clients wanted to move more of Securify’s services in-house. The company’s business model once again evolved.
“Right at that time, the market changed its mind. Customers came to [us] and said we’d like to run it in-house and have it on our networks, so we repackaged ourselves as a packaged software solution,” says Karen White, a principal with Pequot and the co-chair of the company’s board of directors. Both White and Vice President Jeffrey Martin of Pequot sit on the company’s board alongside Benchmark’s Beirne and Ben Coughlin, a principal with Spectrum.
In January, the company shipped the first version of its software. Although the company will not reveal the name of its customers, CEO Mark Hangen says customers already number more than a dozen and reach into the financial services, government and security consulting sectors.
Securify provides network monitoring and analysis. Its software rides along any network switch and monitors all the data going through that switch to verify that it complies with the network’s policies. If there is a problem, it will alert a network administrator by phone, pager or email. It can be used to detect problems in firewall configurations or to prevent unauthorized Web-based remote access to internal corporate workstations.
“It’s figuring out what the network is supposed to be doing and finding out what misbehavior is going on,” White says. “Our job is to be finding the vulnerabilities and plugging the vulnerabilities and mapping the network and against that norm, monitor the network, get alerts and prioritize anomalies.”
Proceeds of the round will be used to hire a sales and marketing team and to fund more engineering to add to the software’s functionality. This round of cash should be enough to “get through the next couple of years quite handsomely with money to spare,” Hangen says.
Contact Carolina Braunschweig at: Carolina.Braunschweig@tfn.com