On January 26th, Lumigent Technologies announced that it has secured a $6 million round from North Bridge Venture Partners to set a new course for the Acton, MA company [press release here]. Recently, we had the opportunity to sit down and chat with President and CEO, John Capobianco, and Paul Campaniello, the VP of Marketing, about this latest infusion and where they are headed with the company. One of the things that struck us immediately about the company was the introduction of Application GRC as a subset of the overall IT GRC market (Lumigent has actually trademarked the term). While technologically I can see the approach they are taking, especially considering where their product sits in the stack, it seems like spending $6 million to grow sales and marketing might not be enough cash to try to redefine the marketplace.  Market issues aside, Capobianco summed up their play against the other IT GRC players very succinctly when he said, "We don't just monitor the controls, we are the controls." We think this is a smart strategy as more and more vendors are trying to fight each other to the top of the pyramid as the single highest aggregation point for compliance related data. This also plays well to the "feature not a product" strategy that we've seen work so well in the DLP space. When asked about this, Capobianco elaborated by saying, "The IT GRC space still has a long way to go. It’s fraught with tools and consultants instead of finished business apps." We certainly can't argue with that, as it's something we have been railing against for some time. 

Based upon how quickly Lumigent can integrate with financial applications, we pondered out loud about who might be a good suitor for them down the road. Names like Oracle came up and were quickly dismissed by Capobianco; "Why won't Peoplesoft/Oracle do this? Because they don't have the subject matter expertise, it's a big distraction for them and it's non-core, and they aren't independent."

Of the new Lumigent executives that joined in conjunction with this round, John Capobianco, Tom Stiling, and Ron Nall have worked together previously at Bluestone Software, Computer Associates, Curl Corporation and MEDecision.  Paul Campaniello and Fred Edling are both brand new additions to the team.

All of these are very valid points and are similar to those echoed in other plays of this kind. Considering the opportunity for a platform play, Lumigent feels that they would be a better fit for the likes of HP, BMC, or IBM. While still a bit early for this kind of speculation, we plan to keep an eye on these guys and hope to meet up with them when we are in Boston for the SOURCE Conference next month.

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Proving that there is plenty of life left in the GRC space, eIQnetworks secured their first round of institutional financing this week led by Venrock. Venrock brings a significant amount of security space experience to the table having funded Vontu, IMLogic, Pedestal, and Whole Security, all of which eventually found there way into Symantec's hungry belly. Authentica, picked up by EMC, and Haystack Labs, acquired by McAfee round out the security trifecta. With CipherMax, Imperva, Red Seal, and CoreTrace still out in open water. Venrock partner, Mike Tyrrell, joins eIQ's board as part of the transaction.

Rest assured, with a track record of liquidity events around security products, and Tyrrell's past expereince on deals ending at SYMC (IM Logic and Pedestal), Venrock is one to watch. In the meantime, we're keeping tabs on eIQ.

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