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A $150 Million Dollar Cybersecurity Rocket Launcher

  |   Allegis News

Allegis Capital says investing in cybersecurity isn’t for newcomers.
And Allegis is no newbie to security.

 

by Steve Morgan, Founder & CEO Cybersecurity Ventures, Sandhill.com – Sept 14, 2015 – If you haven’t heard of Allegis, then hear this: they recently closed on $100 million for a fund that is investing into cybersecurity startups. The Wall Street Journal reported that the fund’s target is about $150 million. That’s some serious rocket fuel about to be poured into young cybersecurity companies.

Based in Palo Alto, Calif., Allegis Capital is a VC firm that invests in early-stage, large-market opportunity cyber businesses.

One of Allegis’ target markets is IoT security. The Internet of Things security market is expected to grow from $6.89 billion in 2015 to $28.90 billion by 2020, according to a report from Markets and Markets. Research and advisory firm Technavio’s analysts forecast the global IoT security market to grow at a CAGR of nearly 55 percent over the period 2014 to 2019.

Another target market for the firm is security analytics, a market expected to be worth $3.22 billion globally by 2018, according to Markets and Markets. There’s a lot of headroom for growth in the big data and analytics market, which will reach $125 billion worldwide in 2015, according to research firm IDC. Big data analytics tools have emerged as the first line of defense for protecting corporate networks.

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Experience Matters for Security Startups – Venture Capital Series Part 3

  |   Allegis News

Vic Wheatman Speaks with Robert Ackerman of Allegis Capital

The level of venture capital financing has hit new heights with increasing investments in information security. Some venture capitalists (VCs) specialize in finding and funding startups in security, which is a unique segment within technology. What does this mean for security startups? And how does an investor’s perspective impact Chief Information Security Officers?

In part one of a three-part series, Security Current’s Vic Wheatman speaks with Robert Ackerman, founder and managing director of Allegis Capital about the current state of VC funding and the burgeoning security field.

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Experience Matters for Security Startups – Venture Capital Series Part 2

  |   Allegis News

Vic Wheatman Speaks with Robert Ackerman of Allegis Capital

The level of venture capital financing has hit new heights with increasing investments in information security. Some venture capitalists (VCs) specialize in finding and funding startups in security, which is a unique segment within technology. What does this mean for security startups? And how does an investor’s perspective impact Chief Information Security Officers?

In part one of a three-part series, Security Current’s Vic Wheatman speaks with Robert Ackerman, founder and managing director of Allegis Capital about the current state of VC funding and the burgeoning security field.

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Allegis Capital Adds Two More Cybersecurity Industry Experts John Stewart, CISCO’s SVP Chief Security & Trust Officer & Joe Levy CTO of Sophos Are Named Venture Partners.

  |   Allegis News

Early Stage Cyber Security Focused Firm Now Has 8 Venture Partners.

 

PALO ALTO, Calif. (August 17, 2015) – John Stewart, the leader of Cisco Systems’ Security and Trust Organization, and Joe Levy, chief technology officer of Sophos, a developer of computer security software and hardware, have been named as venture partners at Allegis Capital the firm announced today. Stewart, and Levy, are two of eight venture partners at Allegis, which focuses on investments in early-stage cybersecurity companies. Stewart is on the board of Allegis portfolio company Shape Security and previously was an executive at Allegis portfolio company SandPiper/Digital Island. Levy was previously the chief technology officer of Allegis portfolio company Solera Networks.

Stewart and Levy add additional strength to an already strong team of venture partners, said Robert Ackerman, founder and managing director of Allegis Capital. They have worked with Allegis in one capacity or another for years and have deep technology, market and operating expertise, as well as long histories in cyber security.

“John and Joe are two proven veterans in cyber security and their experience will not only reinforce our strength in cyber security investing but will be invaluable to our firm and help us better serve our entrepreneurs,” Ackerman said. “They know the cyber security landscape well and will give our portfolio companies both strategic guidance and business execution if need be. They are deeply connected and have unmatched insights,” Ackerman added.

Stewart and Levy Backgrounds

John Stewart formed and leads Cisco’s Security and Trust Organization, underscoring Cisco’s commitment to address two of the most critical issues that are top of mind for boardrooms and world leaders alike. Supplementing his role at Cisco, Stewart sits on technical advisory boards for Area 1 Security (also an Allegis portfolio company), BlackStratus, and Threatstream. In addition to Shape Security, he is a member of the board of directors at Shadow Networks and the National Cyber-Forensics Training Alliance (NCFTA). He also serves as a special advisor to Redseal’s board of directors. Additionally, Stewart serves on the Australian Department of the Prime Minister and Cabinet Cyber Security Review panel and on the Cybersecurity Think Tank at University of Maryland University College. Stewart also served on the CSIS Commission on Cybersecurity for the 44th United States Presidency. Most recently, he was recognized with the RSA 2015 award for Excellence in Security.

Levy, who has more than 20 years of leadership and development expertise in information security, joined Sophos as chief technology officer in February 2015. Prior to Sophos, Joe was CTO for Blue Coat Systems, and, before that, CTO of Solera Networks. Prior to Solera, Joe was CTO of SonicWall, where he led research and development teams in next-generation firewalls, deep packet inspection, cryptography and secure remote access. Earlier in his career, Joe worked with OneNet. Levy holds several security, networking database and virtualization patents. He has also co-authored a book on wireless network security.

Levy and Stewart Join Six Other Allegis Venture Partners

The other venture partners at Allegis are Nawaf Bitar, senior vice president of VMware and general manager of its cloud platform business unit; Hossein Eslambolchi, founder, chairman and CEO of Cyberflow Analytics; Tom Gillis, founder and CEO of Bracket Computing; Todd Rowe, managing director of global channel sales at Google; Jeff Williams, vice president of worldwide sales and business development at FireEye, and Jean-Louis Gassée, a long-time Allegis partner and founder of Be Inc., the creator of the BeOS computer operating system.

About Allegis Capital

Allegis Capital is a seed and early-stage venture capital investor in companies building disruptive and innovative cyber security solutions for the global digital economy. Founded in 1996, the firm has more than $700 million in capital under management and has been active in cyber security investing since 2000. Its cyber security portfolio includes: Area 1 Security, Bracket Computing, E8 Security, Red Owl Analytics, Platfora, Shape Security, Signifyd, Synack and vArmour.  

Contact: Jennifer Jones 650-465-5831 jennifer@jenniferjones.com or Steve Kaufman 352-633-3716 steve.kaufman@centurylink.net

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Experience Matters for Security Startups – Venture Capital Series Part 1

  |   Allegis News

Vic Wheatman Speaks with Robert Ackerman of Allegis Capital

The level of venture capital financing has hit new heights with increasing investments in information security. Some venture capitalists (VCs) specialize in finding and funding startups in security, which is a unique segment within technology. What does this mean for security startups? And how does an investor’s perspective impact Chief Information Security Officers?

In part one of a three-part series, Security Current’s Vic Wheatman speaks with Robert Ackerman, founder and managing director of Allegis Capital about the current state of VC funding and the burgeoning security field.

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Sage and eFileCabinet Partner to Offer Accountants One Comprehensive Business Management Platform

  |   Portfolio News

Sage Summit – NEW ORLEANS (July 28, 2015) – Sage, a leading provider of business management software and services to Small & Medium Businesses, today announced it is partnering with eFileCabinet, the leading hosted electronic document management (EDM) solutions provider, to help accountants move away from the time-consuming and costly processes of manually scanning, storing, managing and sharing records and documents.

The partnership will enable users of Sage Impact cloud-based platform to sign up for and use the eFileCabinet cloud document management solution from within the Sage Impact dashboard.

Sage Impact is the accountants’ everyday business management platform and go-to for access to payroll, accounting, financial management, business intelligence, community, new business leads and more, all managed in one central hub. More than 150,000 users worldwide rely on eFileCabinet document management solutions to provide simple but effective document management solutions. eFileCabinet’s document management solutions are designed to help organizations capture, manage and protect their data regardless of industry.

“Partnering with eFileCabinet will provide our users with a secure document management system that will enable them to be more productive, save and free up time to focus on profitability and their clients,” said Jennifer Warawa, global vice president of product marketing for accountants at Sage.

“Our recent research has shown that nearly one in five firms view cloud document management as being a tool that would significantly improve management of their firm; yet more than 20% feel as though their needs aren’t being addressed today,” added Warawa. “We recognize the importance of meeting the needs of accountants by either creating those solutions ourselves or through strategic partnerships, and in this case eFileCabinet provides a great solution that will benefit our accountants.”

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Exclusive: cybersecurity startup RedOwl raises $17 million series b

  |   Portfolio News

This Baltimore cybersecurity startup routs insider threats.

 

by  Robert Hackett, Fortune.com – Jul 13, 2015 – Sure, Guy Filippelli did a stint with the National Security Agency. As a member of that spy team, he helped re-architect how the agency disseminated intelligence to military officers. But that’s not where Filippelli cut his teeth. “Actually, the army was much more formative for me,” the CEO and founder of cybersecurity startup RedOwl tells Fortune. In late 2001, Filippelli, by then a West Point grad with experience in computer science, had been gearing up for the United States’ post-9/11 invasion of Afghanistan. The military’s intelligence apparatus was technologically lacking at the time, he says, and so the top brass selected a few young army officers to run software engineering teams, to boost officers’ decision-making capabilities. That’s when Filippelli got his start.

“In the army, nobody is gathering intelligence just to gather intelligence,” he says, hinting at an essential difference between the missions of his former employers. “An army intelligence team’s goal is to quickly get data together and to turn that into information that can be actioned in support of a decision on the battlefield.” The job entails gathering relevant details quickly, correctly, and serving them up to the leaders devising strategies. During conflict, lives depend on it.

Today, Filippelli is applying that insight at RedOwl, a cloud-based behavioral analytics software company he founded in 2011 after leaving the public sector. The Baltimore, Md.-based firm specializes in bringing together disparate streams of data within an organization. They could include activity on the IT network, email exchanges, and other sources of data, in order to help companies mitigate insider risk—which could manifest as a rogue, sloppy, or compromised employee, for example.

On Monday, RedOwl will announce that is has raised a $17 million Series B round of funding, bringing total funding to nearly $30 million so far. Participants in the latest round include Allegis Capital, a venture capital firm, which led the raise, as well as Blackstone Group, the private equity firm, and angel investor Marc Benioff, the founder and CEO of sales-tool giant Salesforce. The company already has a relationship with In-Q-Tel, the venture capital arm of the Central Intelligence Agency.

Soon after contractor and whistleblower Edward Snowden leaked a trove of NSA internal documents in 2013, Filippelli says that RedOwl’s appeal leaped from a “nice to have” to a “need to have” among potential customers. The company’s flagship product, “reveal,” monitors users, spots anomalies, predicts malfeasance, and gives the operators a chance to stop data heists before they happen.

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Allegis Capital to Emphasize Cybersecurity With New Fund

  |   Allegis News

by Deborah Gage, WSJ Venture Capital Dispatch – Jul 1, 2015 – Allegis Capital has closed on $100 million toward a new fund that will emphasize investments in cybersecurity startups. The fund’s target is about $150 million, but the firm announced the first close because “we wanted to get going,” said founder and Managing Director Bob Ackerman. “All our deal flow in cyber comes from entrepreneurs, and we want to make sure that every entrepreneur doing something out there knows what we’re doing.”Although the firm has invested in cybersecurity companies since 2000–notable investments include the email security company IronPort Systems, which sold to Cisco Systems Inc. in 2007 for $830 million–historically, cybersecurity has been viewed as a niche, he said. Now “everybody acknowledges there is a problem and we don’t have a lot of explaining to do,” Mr. Ackerman said. Cybersecurity “stands in front of the information technology infrastructure that underlies the entire global economy.”

In 2014—a year in which at least four Fortune 500 companies revealed cybersecurity breaches—U. S. venture capitalists invested $1.77 billion, a record amount, into privately held cybersecurity companies, topping the previous record of $1.62 billion set in 2000 during the dot-com boom. Globally, venture-backed cybersecurity companies raised $1.9 billion last year, also a record, according to Dow Jones VentureSource. The new fund, Allegis VI LP, will invest in two types of cybersecurity startups: those securing legacy infrastructure that was designed before so many things were connected to the Internet, and those creating new platforms that include security as part of the original design.

Read the full article about Allegis Capital’s new fund, including the two companies it has backed from it, at Dow Jones VentureWire.

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Signifyd Announces $7M Series A Financing to Accelerate Growth of its Enterprise-Class E-commerce Fraud Platform

  |   Allegis News

Tim Eades (CEO vArmour Networks, former CEO SilverTail Systems) and Pete Bodine have joined the Board of Directors.

 

SAN JOSE, California, July 13 – Signifyd (www.signifyd.com), the fastest growing provider of fraud protection for e-commerce businesses, announced that it has raised $7 million in a Series A round of financing led by Allegis Capital with participation from Resolute Ventures, IA Ventures, QED Investors, Lucas Ventures and Tekton Ventures. This brings the company’s total funding to $11.2 million since it’s founding by two PayPal veterans. The new financing will be used to further accelerate growth and expand the engineering, sales and marketing teams. As part of the investment, Pete Bodine, managing director at Allegis Capital, will join the board of directors. Signifyd is also announcing the appointment of Tim Eades (CEO vArmour Networks, former CEO SilverTail Systems a cutting-edge fraud protection company acquired by RSA in 2012) as an independent member to the Board.

Signifyd solves the fraud challenges that e-commerce businesses persistently face: billions of dollars lost in chargebacks, customer dissatisfaction from mistaken declines, and operational costs due to tedious, manual transaction investigation. Signifyd’s technology not only tells retailers which payments to accept, but also guarantees these payments in the case of a chargeback.

“The chargeback process for merchants is broken and is clearly ripe for innovation,” said Raj Ramanand, Co-founder & CEO of Signifyd.  “The Signifyd platform marries behavioral psychology with machine learning to interpret user purchasing patterns.  It automates a process that takes customer service agents hours each day and puts a guarantee behind that automation.”   “Many companies have tried and failed to solve this problem with software alone.  Signifyd is different because of its financial guarantee.  We truly solve the problem,” added Michael Liberty, Co-founder & COO of Signifyd.

“Signifyd has the team and technology to transform this industry. Its product reduces friction, increases revenue, and lowers costs,” said Pete Bodine, Managing Director at Allegis Capital. “They’ve built a company focused on customer success with a real business model, growing revenue at 20% month-over-month. This investment will help the company achieve its goal of fundamentally reshaping the fraud protection and payments industry.”

“For years, the transactional analytics market has been begging for disruption. Online criminals are continuing to rack up millions in fraudulent dollars with ease. Now, Signifyd is equipped with the technology and leadership to fundamentally change the fight against online crime,” said Tim Eades, CEO of vArmour and former CEO of Silver Tail Systems. “The Signifyd platform guarantees payments for merchants, essentially turning online crime on its head. I can’t wait to help the company along the way as they scale their explosive growth and provide merchants with a product that solves some of the most complex problems they are dealing with today.”

Raj Ramanand, a veteran of PayPal and FedEx, and Michael Liberty, a veteran of PayPal and JPMChase, developed Signifyd.  They’ve laid the foundation for the company upon their deep fraud experience and passion for customer success. Signifyd already counts major enterprise and mid-market companies among its customers as well as some of the hottest e-commerce startups. For more information, please visit: www.signifyd.com.

About Signifyd

Headquartered in San Jose, CA, Signifyd was founded by Rajesh Ramanand and Mike Liberty, a team of veteran risk and fraud experts from PayPal, to help online businesses prevent payment fraud. Signifyd’s full-service cloud platform simplifies fraud detection through a financial guarantee, allowing businesses to increase sales while reducing fraud losses. Signifyd is in use by multiple companies on the Fortune 1000 and Internet Retailer Top 500 list. The Company is backed by top tier Venture Capital firms such as Allegis Capital, Andreessen Horowitz, Data Collective, IA Ventures, Lucas Ventures, QED Investors, Resolute.VC and Tekton Ventures. For more information about Signifyd, please visit http://www.signifyd.com. Follow Signifyd on Twitter @signifyd

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RedOwl Secures $17 Million to Deliver Behavioral Analytics and Insider Risk Management to the Enterprise

  |   Allegis News

Allegis Capital Managing Director Robert Ackerman Appointed to Company’s Board of Directors

 

SAN FRANCISCO, July 13, 2015—RedOwl, a leader in insider risk management and security analytics, today announced it has raised $17 million in Series B funding led by Allegis Capital. The company will use the new funds to continue its expansion, further build out the product development and data science teams, and begin broadening its go-to-market efforts. Reveal, RedOwl’s flagship software program for insider risk management, is deployed across multiple verticals and used within many Fortune 500 companies including The Blackstone Group and K2 Intelligence.

This announcement follows a year of exceptional growth for RedOwl, during which the company nearly doubled its team by adding new data scientists and security engineers, and expanded internationally into London. The Series B round includes participation from Blackstone as an investor, as well as previous angel investors including Salesforce Chairman and CEO Marc Benioff, bringing the total funding amount raised to nearly $30 million.

RedOwl also announced today that Robert Ackerman, founder and managing director of Allegis Capital, has joined the company’s Board of Directors, further validating that RedOwl’s human-centric approach is necessary in addressing today’s advanced cyber threats. Existing Board members include Jay Leek, chief information security officer (CISO) of The Blackstone Group, and Elad Yoran, CEO and founder of Security Growth Partners, and a former advisor to the U.S. Department of Homeland Security and the FBI’s Information Technology Advisory Council.

“In 2014, as part of Blackstone’s overall security strategy, we set out to tackle the growing concern around insider threats. We reviewed over 15 different insider threat vendors and ultimately landed on RedOwl for many reasons; most importantly, the company was able to monitor disparate and multiple sets of unstructured data that were being overlooked by other insider threat solutions,” said Jay Leek, the Chief Information Security Officer (CISO) of Blackstone. “After bringing them on board to help secure Blackstone we realized that they provided many insights and had a unique value proposition which quickly led us to become a customer, followed shortly by us pursuing an investment in their organization. RedOwl has the potential to truly change the way we think about insider threats and security, focused on moving beyond the perimeter to securing the human-side of an organization.”

Intelligence-based Approach

A U.S. Army veteran who spent years working in military intelligence in Iraq and Afghanistan, RedOwl founder and CEO Guy Filippelli recognized parallels between the needs of large enterprises and his work developing first-of-its-kind data analytics software to provide commanders on the battlefield with vital information to make the most informed tactical decisions about the military’s biggest asset—people. Upon leaving the Army, Filippelli decided to extend that vision to building software that would give enterprise security the power of “situational awareness.” Rather than relying on one channel or data source, large companies in highly sensitive industries like financial services, healthcare and government use RedOwl’s software to understand what is happening at the human layer of the business and better manage risk via a multi-dimensional view across disparate data sources.

Through its unique human-centric approach to security, RedOwl allows companies to protect the increasing volumes of sensitive data now being generated and used by employees across the organization by identifying and analyzing changes, patterns and anomalies in user behavior. Companies use RedOwl to draw from multiple data sources in order to visualize what is happening at the human layer of the business, identify suspicious or risky behavior in real-time, and proactively identify where unforeseen risks reside within an organization.

“Organizations are responsible for the safety of the data they generate and collect, but each employee with access represents another layer of risk to the organization, be it through behavior that is careless, malicious or sloppy,” said Filippelli. “Our proprietary behavioral analytics software provides visibility into the human layer of the business, giving enterprise security teams the ability to identify patterns across disparate data streams and create actionable, situational intelligence that drives informed business decisions in real-time.”

Diverse Experience Across the Board

With the addition of Robert Ackerman, RedOwl’s board now includes leading security investors, seasoned industry experts who have developed and grown successful enterprise technology businesses and strategic advisors who understand that the company’s unique human-centric approach to security has the ability to change how their industries manage risk.

“Given that between 70 and 80 percent of cyber attacks have an internal component, the enterprise needs to shift its attention away from the perimeter and focus on monitoring insider risk. As Allegis Capital increases its investment in cutting edge security teams, RedOwl stood out as a company addressing a critical piece of the security puzzle—the people,” said Robert Ackerman, founder and managing director of Allegis Capital, which recently secured a $100 million fund to invest in additional cybersecurity ventures. “RedOwl has an experienced executive team that is approaching insider risk in an entirely new way, whether it’s an employee with malicious intent, a compromised employee or someone that is simply acting carelessly. We’ve been investing in the security analytics space for many years and RedOwl is ahead of the pack—they provide immediate value to companies of all sizes across all verticals, and we look forward to seeing them change the way the enterprise thinks about security.”

About RedOwl

RedOwl offers a cutting-edge analytical solution to security, compliance, and investigative use cases. RedOwl’s flagship product, Reveal, provides immediate value to forward-leaning organizations that understand the massive potential of their untapped internal data sources in improving oversight and reducing risk. For more information, visit www.redowlanalytics.com.

About Allegis Capital

Allegis Capital is a seed and early-stage venture capital investor in companies building disruptive and innovative cyber security solutions for the global digital economy. Founded in 1996, the firm has more than $700 million in capital under management and has been active in cyber security investing since 2000. For more information, visit www.allegiscap.com

Media Contact

Danny Schwartz

RedOwl

Danny@redowlanalytics.com

410.528.8397

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