Data loss prevention vendor Verdasys announced a $12 million investment round and named a longtime security industry executive as its new CEO.
The funding round was led by existing investors GE Pension Trust and Fairhaven Capital of Cambridge, Mass., with a new, individual investment from Brookline Venture Partners. The Waltham, Mass.-based security vendor named Kenneth Levine, a former McAfee executive and formerly CEO and chairman of NitroSecurity, as its new CEO. Levine, who is a co-founding partner of Brookline Venture Partners, previously served as senior vice president and general manager of security management at McAfee, which acquired NitroSecurity in 2011.
Levine told CRN Wednesday that the company would use the latest funding round to build up a more robust partner program with additional headcount for support and bolster product development by doubling the number of members of the Verdasys engineering team.
"Our goal would be to find the right amount of channel partners in the right space so that we can support each other in growing the business, satisfying the customer and making money," Levine said. "It is hard for us as a smaller company to expect to be their No. 1 vendor in their portfolio of products, but that is our goal."
Levine said Douglas Bailey, formerly senior director, channel marketing at McAfee, will spearhead the channel program changes.
Levine replaces Jim Ricotta, who served in that role for the past three years. Verdasys sells Digital Guardian, an agent-based data loss prevention platform that incorporates behavior-based data to provide protection against insider threats and external attack scenarios. In addition to being available as an on-premise offering, the product can be delivered via a managed service.
With the latest investment, the company, which was founded in 2003, has raised $65 million in venture funding. The company said it has 200 customers, including DuPont, Siemens, The U.S. Department of Justice, GE, Cigna, Honda and Ferrari.
The goal with the latest funding, according to Levine, is to expand into new markets by better engaging solution providers in the channel and broadening the product capabilities into areas beyond data loss prevention. Data protection will continue to be the essence of what Verdasys addresses, but the technology can be extended toward use cases around detecting malware and advanced threats, Levine said. For example, Verdasys launched a connector for the FireEye threat detection appliance last year designed to identify infected systems and take them offline. The platform also submits suspicious files collected on host systems for analysis by FireEye.
Levine was a key member of the startup team at Cabletron Systems, where he spent 15 years as executive vice president of sales, growing revenue to nearly $2 billion. Levine founded Brookline Venture Partners in 2004 to invest in early stage technology companies.
Levine said Verdasys stands to gain ground in a market for data loss prevention and integrated, policy-driven encryption that continues to grow. The data loss prevention market is estimated to have reached between $680 million and $710 million in 2013 to and grow 22 percent to 25 percent by the end of 2014, to approximately $830 million, according to Gartner. The research firm said Verdasys has a strong data loss prevention offering that competes against Symantec, McAfee, Websense and RSA, The Security Division of EMC.
"A lot of people feel DLP has gotten the reputation of being a monster to deploy and implement and only for companies with a large IT staff, but Verdasys has found a way to reduce the implementation and deployment complexities," Levine said.
Bailey told CRN that the company would increase channel support and transition the current sales organization to become more channel-focused. Bailey, who served as executive vice president of NitroSecurity before it was acquired by McAfee, said the focus will be on activities to attract the right channel partners and continue to grow the company's technology ecosystem. In addition to FireEye, the company has key partnerships with Hewlett-Packard, Citrix and IBM and an OEM partnership with Fidelis for its managed DLP service.
"We came from McAfee, which has a tremendous channel program, because having strong partners to drive your products is one of the things that they have understood and do well," Bailey told CRN. "We'll be assessing all parts of our go-to-market strategy and determining what aspects of that we can bring over from McAfee to enhance the program itself."
PUBLISHED MARCH 19, 2014