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ALLEGIS CAPITAL HOLDS FIRST CLOSE ON $100M CYBERSECURITY FUND: ALLEGIS VI

  |   Allegis News

Early-Stage Venture Firm Puts Capital to Work In Huge Investment Opportunity
Two New Investments Already Committed: E8 Security and Signifyd

PALO ALTO, Calif. (July 1, 2015) — Allegis Capital, a nearly two decade-old diversified seed and early-stage venture capital investor in technology startups, is announcing the first close of Allegis VI, a $100 million early-stage fund committed to cyber security investments, the firm announced today.

In addition to targeting cyber security startups, the $100 million – committed from new and current investors – will also be used to invest in related companies in data analytics, the Internet of things (IoT) and virtualization, all areas in which Allegis has been investing for more than 10 years. The fund will invest both in companies that secure legacy computing infrastructure and next-generation computing platforms in which security is inherent in the design. ACG Partners projects an 11 percent annual compounded growth rate of cyber security spending, reaching $140 billion in 2018.

Allegis has already made two new investments under the aegis of its new fund in E8 Security and Signifyd. E8 is developing an advanced threat detection technology that bypasses preventive controls and rule-based monitors. Signifyd protects online stores by scoring hundreds of risk indicators to ensure transactions are legitimate.

Allegis also made cyber security investments in the last 24 months in Bracket Computing, vArmour, Shape Security, Area 1 Security, Synack, Platfora, Moki Mobility and E-File Cabinet.

Allegis has focused on cyber security startups, albeit not exclusively, since 2000. Past portfolio companies have included IronPort Systems, an email security firm that was acquired by Cisco Systems for $830 million, and Solera Networks, which was acquired by Blue Coat in 2013.

Limited partners who are funding the effort include institutional and strategic investors and new investor capital includes global pension funds.

 Cyber Investing Offers Huge Opportunity

There is “a substantial need for new and promising cyber security startups and a huge investment opportunity in them,” said Allegis Founder and Managing Director Robert Ackerman.

“The digital security landscape is global, dynamic and continually evolving as ‘bad actors’ look to compromise information technology networks to achieve their nefarious goals,” Ackerman said. “Hacktivists, criminals and state actors are all involved in a never-ending barrage of increasingly sophisticated attacks on networks that the global digital economy relies upon for all aspects of daily life.

“Hardening and securing these networks to protect consumers, businesses and governments and the information they manage requires continual innovation,” Ackerman added. “And much of that innovation originates in the world of startups.”

Ackerman will invest with long-time colleagues Spencer C. Tall and Pete G. Bodine, also managing directors.

Allegis Venture Partners Have Expertise in Cyber Security

The Allegis investment team also includes five prominent venture partners. They are Nawaf Bitar, senior vice president and general manager of the cloud platform business unit of VMware; Tom Gillis, founder and CEO of Bracket Computing; Todd Rowe, managing director of global channel sales at Google; Jeff Williams, senior vice president of worldwide sales and business development at FireEye; and Jean-Louise Gassée, a long-time Allegis partner and founder of Be Inc., the creator of the BeOS computer operating system.

Gassée was a former executive at Apple Inc. Bitar, Gillis and Williams were all former operating executives of Allegis cyber security portfolio companies.

Ubiquitous Cyber Attacks

Chronic news reports demonstrate the breadth and depth of successful cyber security attacks. “Over just the past two years, some of the most significant corporations and government entities in the world have been compromised at an unprecedented scale with hundreds of millions of sensitive data records stolen,” Ackerman said. “Successful cyber attacks targeting the U.S government’s Office of Personal Management, Adobe, E-Bay, Target, Home Depot and JP Morgan, among others, demonstrate that no person, corporation or government entity is immune from these threats.

Data-Breach-Chart-WO

 

With the world’s information now largely in digital form and with much of it accessible over the Internet, the cyber security threat is growing at an exponential rate, Ackerman said. In addition, vast quantities of new data are being created every day, making it nearly impossible to keep up with security and private needs using existing technology. ACG Partners projects an 11 percent annual compounded growth rate of cyber security spending, reaching $140 billion in 2018.

“Allegis Capital’s extensive experience in cyber security investing is crucial to our success,” Ackerman said. “It provides the domain knowledge, access to entrepreneurs and customer relationships required to find, invest in and develop the next-generation of best-in-class technology to protect global digital infrastructure.”

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

Contact: Jennifer Jones 650-465-5831 jennifer@jenniferjones.com

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The forgotten story of the iphone released in 1998

  |   Allegis News

by Brian McCullough – internethistorypodcast.com – June 21,2015

Remember this?

So, three things: a widescreen iPod with touch controls; a revolutionary mobile phone; and a breakthrough Internet communications device. An iPod, a phone, and an Internet communicator. An iPod, a phone— are you getting it? These are not three separate devices. This is one device, and we are calling it iPhone. Today, Apple is going to reinvent the phone.

– Steve Jobs, January 9, 2007

It turns out that almost exactly 9 years before Steve Jobs spoke those words and introduced the world to the iPhone, there was another 3-in-1 device that was introduced to the world, and it just so happened that that device was also known as an iPhone. But the company that brought the “first” iPhone to market, all the way back in 1998, was called InfoGear, not Apple.

Here’s the story…

The iPhone that came before Apple’s iPhone

In the late 1990s, there was a fad for devices called “Internet appliances.” The idea was to have smaller, purpose-designed devices that would allow users to jump on the web and do web things without having to whip out a laptop or a PC. Remember, this was back in the day when laptops could still be 10 pound affairs.

So, the industry envisioned smaller devices that you could put on your desk, in your kitchen, maybe on your wall, that would allow you to check your email, browse the web, as a quick and easy, in-and-out affair.

A skunkworks project for just such an “appliance” was started in 1995, inside, of all places, National Semiconductor. Three engineers, Chaim Bendelac, Yuval Shahar and Reuven Marko were given company funds to explore the possibilities for a product that would be part internet, part telephone. They called their brainstorm “Project Mercury.”

At around the same time, a venture capitalist by the name of Robert Ackerman, was consulting with National Semiconductor. Toward the end of a routine meeting, Ackerman’s hosts offered to show him around the engineering lab. It was there that Ackerman would first see …

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eFileCabinet Review: Best Mobile Document Management

  |   Portfolio News

By Chad Brooks, Business News Daily Senior Writer June 3, 2015 02:04 pm EDT

 

After much research and analysis of document management systems, we recommend eFileCabinet Online as the best document management system for businesses with a remote workforce. Ready to choose a document management system? Here’s a breakdown of our complete coverage:

Document Management System Buyer’s Guide

Roundup: The Best Document Management Systems

REVIEW: Best for Small Businesses

REVIEW: Best for Businesses on a Budget

REVIEW: Best for Businesses Using Windows

REVIEW: Best for Businesses Using Macs

Why eFileCabinet Online?

Remote Access
eFileCabinet Online can be used from any location. Unlike on-premises systems that that need to be specially configured to be accessed from outside the office, this cloud-based solution is easily tapped into from any computer with an Internet connection. This gives your employees full access to the system, whether they’re working in your office, from home or any other remote location.

What’s nice is that eFileCabinet Online allows employees to have access to the entire system, not just pieces of it. While some of the other systems we analyzed offered remote access, not all of them provided full functionality from outside the office. This system works exactly the same regardless of where you’re working.

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IMVU’s virtual rooms are ready for social VR

  |   Portfolio News, The Latest

May 20, 2015 9:30 AM
Dean Takahashi, VB Gamesbeat

IMVU was founded in 2004, back when virtual worlds like Second Life were the hottest thing. They’re not as hot any more, but IMVU has figured out how to survive and adapt. And now it’s getting ready for the renewed excitement about virtual reality. The Mountain View, Calif.-based company has had more than 111 million people register over time, and it still has 3 million monthly active users. Those users create their own 3D characters, or avatars, and build static 3D rooms where they can entertain friends in a kind of virtual metaverse.

It isn’t full of interactivity or movement of 3D animated figures like you would find in a game. But all of IMVU is already formatted in a way that it can be viewed in virtual reality via goggles such as Facebook’s Oculus Rift. I visited the company recently and saw demonstrations of the VR environments.

“Creativity is really at the heart of the world for us,” said Brett Durrett, chief executive of IMVU, in an interview with GamesBeat. “We see that virtual reality can be the future of social. We call it social VR.”

VR is going to be one of the bets that Durrett is making for the social world of IMVU, and it’s one of his interesting moves since taking over as permanent chief executive last year. He joined the company in 2005, and he replaced previous CEO Cary Rosenzweig.

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A new breed of startups is helping hackers make millions — legally. The bug bounty business is booming.

  |   Portfolio News, The Latest

From theverge.com

By Ben Popper  on March 4, 2015 09:12 am

 

Shashank Kumar was in seventh grade when he was introduced to computer hacking. At first he had fun breaking in and defacing web sites, something he says he now regrets, but then he learned that he can get paid for reporting the weaknesses he was exploiting. Under the handle @cyberboyIndia, he says he has earned around $30,000 in so called bug bounties, enough to pay for a good portion of his college education.

These days the 19-year-old is supposed to be cramming for his final exams as he prepares for a degree in engineering. But many nights he finds himself awake too late, laptop humming away, hunting for software vulnerabilities on services run by firms like Yahoo, Paypal, and AT&T. On Twitter, Shashank catalogs the rewards he receives for reporting weaknesses, a highlight reel that ranges from a free hat, to a new smartphone, to a $1,500 check. The money is good, although it’s murder on his grades.

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E8 Security Emerges From Stealth, Raises $9.8M in Series A Funding

  |   Portfolio News, The Latest

March Capital Partners, Allegis Capital and The Hive invest in innovative security intelligence and analytics company.

 

 REDWOOD CITY, Calif.–(BUSINESS WIRE)–E8 Security, provider of cyber security analytics solutions to help enterprises detect and manage malicious insider threats and targeted cyber attacks, today announced it closed $9.8 million in series A funding led by March Capital Partners, with participation from Allegis Capital and The Hive. The funding will be allocated to furthering product development, currently in private beta with several large domestic and international organizations, while also expanding the organization’s engineering and development teams.

“E8 Security presents a new approach to addressing cyber security threats”

Recent years have seen an increased number and sophistication of cyber attacks with the average enterprise generating more than 10,000 security events daily. Preventive controls alone cannot defend against all security threats, particularly targeted attacks and insider threats. Priorities for security teams are shifting to more sophisticated detection and response capabilities for visibility into threats that have bypassed perimeter security and preventive controls. Traditional security solutions that rely on previously known threat indicators, pre-configured rules, and malware signatures are no longer effective in detecting malicious activities of sophisticated attackers. Demand for enhanced cybersecurity solutions that go beyond rules and signatures based threat detection increases daily.

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Synack Closes $25 Million in Series B Funding Co-Led by GGV Capital and Icon Ventures, Joining KPCB and Google Ventures

  |   Portfolio News, The Latest

New Financing Fuels Recruitment of Top Researchers, Drives Technology Development to Crowdsource Enterprise Security

From Synack

February 19, 2015 17:16 ET

REDWOOD CITY, CA–(Marketwired – Feb 19, 2015) – Synack, a security startup that has created a unique enterprise-caliber system to safely crowdsource and manage security testing, today announced it has raised $25 million in Series B funding co-led by GGV Capital and Icon Ventures (formerly Jafco Ventures). This brings Synack’s total funding amount to more than $34 million raised in less than two years. Glenn Solomon, managing partner at GGV Capital, and Tom Mawhinney, general partner at Icon Ventures, will be joining Synack’s board of directors.

Existing investors Kleiner Perkins Caufield & Byers (KPCB), Google Ventures, Greylock Partners and Allegis Capital, as well as Derek Smith, CEO of Shape Security; Ray Rothrock, CEO of Redseal Networks and Timothy Eades, CEO of vArmour, also participated in the round.

CEO Jay Kaplan and CTO Mark Kuhr, former National Security Agency analysts, formed Synack in May 2013 with a unique crowdsourced intelligence model that leverages Synack’s top security talent to uncover attack vectors in organizations that can’t be detected by technology alone. The company has experienced remarkable success since securing Series A funding nine months ago — growing revenue by 90 percent, increasing customers by 60 percent and expanding its expert researcher community by 40 percent. Synack continued its focus on recruiting the highest-quality security talent by hiring a new VP of strategy and operations, Gus Anagnos, who previously led information security at PayPal, where he successfully developed and led the first Bug Bounty Program for a financial institution.

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Three white-hot areas for cybersecurity investors in 2015

  |   Allegis News, The Latest

December 22, 2014
Bob Ackerman, Allegis Capital 

The global security market was little more than a cottage industry in 2002, when it was an insular $3.5 billion market dominated by just five vendors. Fast-forward to today and there is — I estimate — $87 billion being spent in 2014, while that number should increase to $120 billion by 2017, according to AGC Partners . What’s more, venture investment in cybersecurity startups is red hot. In the second quarter of this year, security startups took in $767 million in financing, according to CB Insights. That’s more than any other quarter in recent history. In 2013, VCs bankrolled 230 security startups, and even more are getting funded this year.

But not all security startups are created equal. As investments and budgets increase, two distinct approaches to cybersecurity are emerging. The first is aimed at protecting the legacy of the past; the second is dedicated to developing technology that’s inherently secure for the future. Strategies that protect the legacy focus on the gaps, holes, and vulnerabilities in today’s IT infrastructure, the majority of which is based on a 45-year-old architecture.

 

As a venture investor, I’m interested in both areas. That said, there is a lot more growth in solutions and technologies that are focused on safeguarding the future. I’m intrigued by new technology platforms that are secure by design, by technologies that are truly impregnable, not technologies that close existing gaps.

 

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Are federal integrators where technology goes to die? Here’s why one Silicon Valley investor thinks so.

  |   Allegis News, The Latest

Jill R. Aitoro
Senior Staff Reporter-
Washington Business Journal
Oct 28, 2014

Cybersecurity is a key area of investment for Allegis Capital. But if a promising startup says it’s going to target federal government, Managing Director Bob Ackerman shows them the door as fast as possible.

It’s a reality I’ve reported on before and spurs a lot of D.C.’s most promising startups to pack their bags for Silicon Valley: Regardless of the billions of dollars the government claims to filter to technology, venture capital firms have no patience for the federal contracting morass.

And in the case of cybersecurity in particular, it’s a shame, Ackerman told me. Proximity to Fort Meade in Maryland makes the D.C. metro area a natural reservoir of cyber talent, but the supply of what he described as relevant capital remains critically low. So young entrepreneurs consult for a while, then leave when it comes time to get their big idea off the ground.

Consider Kevin Mandia. He was focused on consulting when he was at the helm of Mandiant and made a name for himself talking about Chinese hackers targeting U.S. systems, Ackerman said. But then Mandiant got bought by FireEye Inc. in Silicon Valley, Mandia moved out west when he was appointed chief operating officer, and Mandiant has gradually been merged with other acquired companies to offer a product that targets primarily commercial customers.

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