AVG Technologies, a provider of internet and mobile security, announced this morning its acquisition of Bsecure Technologies, an Internet filtering provider. Between venture investments, acquisitions and even an IPO, this is the 10th transaction in the IT security space since the beginning of November. Earlier this week, Lyceum Capital announced its acquisition of security software maker Clearswift, which manages inbound threats, data loss prevention, web access policies and compliance, while two weeks ago, Unsubscribe.com, a Los Angeles–based startup that makes security and privacy tools for email and social networking applications, was acquired by TrustedID, a credit and identity protection technology firm.
IT security firms have been pulling in venture funding with just as much fervor. Rapid7, a provider of security risk technology, received the largest sum the security sector has seen recently when it closed a $50 million Series C financing from Technology Crossover Ventures last month. Four other companies also announced investments in November: Skybox Security, a provider of proactive security management solutions, raised $6 million; Quarri Technologies, a maker of on-demand web information security software, raised $3 million; Agari, an email security startup, raised $2.5 million; and Certivox, an information security company, raised $2.4 million. Security and compliance provider Solutionary announced a recapitalization with an equity infusion by Clearlake Capital Group as well last month (Signal Hill initiated the transaction).
Perhaps the most important transaction during the month of November was the initial public offering of Imperva, which offers database, file and web application solutions to protect data in data centers. Overshadowed in the media by the highly criticized Groupon IPO, Imperva (NYSE: IMPV) quietly offered five million shares at $18, above the expected range of $14 to $16, raising $90 million. More impressively, despite severe gyrations of the public markets, Imperva’s stock price has climbed over 15% since it debuted November 8. In comparison, Groupon’s stock is down more than 31% since its offering and general market indices are up between 0.6% and 3%. Imperva marks the first IT security IPO in nearly two years: while KEYW, a provider of cybersecurity solutions to defense, intelligence and national security agencies, came to market with a $91 million offering in October 2010, the last pure IT security company to IPO was Fortinet, which raised $180 million in November 2009 (Signal Hill served as co-manager on the deal).
The security and vulnerability management market is predicted to exceed revenue of $5.2 billion by the end of 2014, according to industry analyst firm IDC3. Venture and PE firms have not been shy about investing in the sector and established security vendors are buying start-ups to fill in their portfolios to supply customers with complete protection. With security threats continuing to climb, the IT security sector can only be expected to witness more growth.