In a move that continues to surprise us, VARs and boutique consulting shops in the infosec and GRC space are getting funded. Most recently, Accuvant picked up an undisclosed sum from Sverica International, LLC. This follows on our coverage regarding Midwest up-and-comer Fishnet [article here], and virtual unknown, Digital Forensics Professionals [article here], providing more datapoints in an interesting trend. Is the venture community really this eager to put their money to work that will spoonfeed the channels?
Analysis and Commentary, Funding
Palo Alto Weaves a Tangled Web With Their $27 million C Round
Firewall hardware newbie Palo Alto Networks, based (oddly enough) in Sunnyvale, CA announced on Tuesday that it has raised $27M in a Series C round of funding. While the round was led by Lehman Brothers Venture Partners, it also included prior investors Globespan Capital Partners, Greylock Partners and Sequoia Capital. The company secured a B round of $18 million in June 2007, and coupled with this latest brings the company's total raised to around $53M. This news comes quickly on the heels of Palo Alto Networks announcing they had hired Lane Bess as CEO last month. Bess, a TrendMicro alum, replaces Dave Stevens, who left the company.
In a rare Valley phenomenon, founders Nir Zuk, Yuming Mao and Rajiv Batra who started the business back 2005 remain with the company. Zuk, who worked previously at NetScreen Technologies before their acquisition by Juniper Networks in 2005, is their Chief Technology Officer. Batra, also of Juniper but through the Peribit purchase in 2005, is VP of Engineering, and Mao, Juniper via NetScreen, serves as Chief Architect.
The board appointments that fell out of this latest round read like a redneck family tree:
-
Asheem Chandna, most recently off a 6 ½ year stint at Check Point Software Technologies as VP of Business Development and Product Management represents Greylock Partners (and is also a board member at Imperva). Chandna also spent some quality time at SynOptics/Bay Networks and AT&T Bell Laboratories in marketing and product positions.
-
Jim Goetz represents Sequoia Capital, but also was at Bay Networks as their VP of Network Management, and before that he rolled through AT&T Bell Labs product and marketing departments.
-
Imperva CEO, Shlomo Kramer, co-founder of Check Point back in 1993, also has a seat at the big boys table.
-
Old Schooler, Bill Lanfri, from the early management team of SynOptics sits on alongside new CEO Bess (who also did some time in AT&T’s marketing department) and CTO Zuk (who also lists Check Point Principal Engineer on his resume).
-
Venky Ganesan of Globespan Capital Partners seems to be the odd man out with few if any direct ties to the alumni departments of the other board members.
Between the board seats and the founders, this goes to show you that it pays to properly research the smaller firms you do business with. The management food chain is one incestuous bunch and often can act as an early indicator as to who makes the dance card when it comes time for the big M&A dance.
Analysis and Commentary, Funding
Rohati Systems Lands $12M B Round
Rohati Systems has secured $12 million to fuel market expansion along with enhanicng their Network-Based Entitlement Control (NBEC) solutions. This second round of funding from Foundation Capital and Matrix Partners follows the Series A money both firms invested back in March of 2007, bringing the total to a staggering $22.6 million, and their product hasn't even been released yet! So much for the "new way" of doing things on a shoestring and being in perpetual beta. To their credit, they have been taking the product on tour, showing it off at the Gartner IT Security summit back in May, and again at the Burton Catalyst Conference in June.
According to the press release, both firms are ecstatic about their investments.
"We are very pleased with the progress Rohati has made since our initial investment in 2005. The significant increase in valuation in this round is a testament to the rapid progress that the team has made," said Shirish Sathaye, general partner at Matrix Partners.
"Rohati continues to be an excellent investment opportunity for numerous reasons. The company has the right combination of management talent, market expertise and proven ability to execute," said Adam Grosser, general partner at Foundation Capital.
This is a clasic case of betting on a solid team with a new twist on a stumbling technology. In this instance, it's a bunch of Cisco guys trying to wake everyone up from the nightmare entitlements has become. Rohati's model for solving the access control problem is to build an appliance that sits close enough to the data assets that it can learn transaction level activity and build views of who touches what. Then, the product can build rulesets (aka: policies) which can be modified by the administrators to further dial them in.
We see this as having a good play within organiztions that are struggling with entitlement reporting for compliance reasons. In this case, just learning the behaviors of the users and logging that activity for future reference can be a huge help in making entitlement decisions. Too often we have noticed that the managers charged with authorizing usres and approving audit reports of user access on aquarterly basis are doing so largely on a guess. Our hope is that this new approach gives them a better view into the user activity and allows for more granualr decision making but without the overhead. Of course, the only way to find out is to get the product to market.
Analysis and Commentary, Funding
Old Maid Vericept Scares Up $8 Million More
Vericept just announced an additional $8 Million in funding from Sigma Partners to live in the basement until they can get married off. With other DLP players getting hitched (reported here and here), it looks like Vericept is going to have to go it alone for a while. Will they die alone in a musty apartment or will they use the warchest to get a facelift and hook a handsome and upwardly mobile sugar daddy? According to the press release, this latest round will be spent getting profitable and to do so, they plan to expand their sales efforts. I guess we can mark one down in the "facelift" category. The quote in the press release from President and CEO Dave Parkinson is jus too good to pass up:
"We are pleased our investors are showing continued confidence in Vericept's vision and execution. Our strength in classification of unstructured data uniquely positions us to capitalize on the huge latent need for protection of intellectual property. Vericept's content-aware technology and classification tools make IP protection realizable."
Let's see, is $8 million from only one of the five firms that have backed you thusfar really an indication of "continued confidence" in your "vision and execution"? Vision and execution that despite boasting over 800 installed customers has yet to turn a profit? It sounds more like waiting out the storm and hoping to get picked up when the DLP game of musical chairs finally ends.
© 2008 Brightfly, Inc.
Powered by You, the Community.