August 12, 2003
Purdue Research Park information security startup secures $8.3 million
WEST LAFAYETTE, Ind. Arxan Technologies Inc., a Purdue Research Park provider of anti-tamper software protection solutions, announced on Monday (8/11) that the company has secured $8.3 million in venture capital financing.
This is the second round of financing for Arxan, a startup venture founded in 2001 within the Purdue Research Park's business incubation complex. Arxan, which now has additional offices in Reston, Va., and San Francisco, Calif., is developing Purdue-licensed information technology that has emerged from Purdue's Center for Education and Research in Information Assurance and Security (CERIAS). The center is an academic research institute and a National Security Agency Center of Excellence in Information Assurance.
Investors include Paladin Homeland Security Fund, EDF Ventures, Solstice Capital and Trident Capital, one of Arxan's initial investors.
"After an extensive review process, we found Arxan to be the technology leader in the anti-tamper software protection space," said Kenneth Minihan, a principal with Paladin Homeland Security Fund. "Arxan offers an innovative security technology that effectively secures sensitive government applications against tampering while avoiding the heavy costs and resources usually associated with these activities.
"Paladin does not typically invest in startups. An early-stage company would have to be truly sterling for us to be interested."
Arxan's technology, EnforcITTM, fortifies software applications to protect their integrity, prevent unauthorized access, and prevent reverse engineering and code lifting. EnforcITTM forms a complex web of small security units, or guards, that work to protect against unwanted tampering. The guards watch code and each other, forming complex networks that are different in every instance of the program.
"Arxan's anti-tamper solution combines multiple protective strategies and can be configured to make it impractical for even determined attackers to circumvent," said Phil Schacter, vice president of directory and security strategies at Burton Group, an enterprise information technology research and advisory services firm.
Arxan will use the capital raised in this round of financing for product marketing, production and expanded distribution allowing customers to purchase products through value-added resellers and systems integrators, as well as directly from Arxan. In addition, the company plans to extend its information security solutions to non-government entities, including digital content providers and enterprise software vendors.
"Closing this round in such a difficult market is an endorsement of Arxan's revolutionary technology and significant achievements to date a successful beta program and commercial product launch, and securing contract awards from the Department of Defense and government customers," said Rich Earley, Arxan's chief executive officer.
Arxan's board of directors includes Minihan, a lieutenant general and former director of the NSA, the Central Security Service, and the Defense Intelligence Agency; and Craig Fields, former director of defense for the Advanced Research Projects Agency.
"The strength of Arxan's board will be key to its growth and expansion, and we believe that Arxan's ability to attract these members is a validation of the importance and timely nature of their security solutions," said Peter Meekin of Trident Capital.
Arxan's technical advisory board includes Eugene Spafford, director of CERIAS, Purdue professor of computer science and a well-known author and adviser to the government on security issues; Carl Dill, former vice president and chief information officer of Time Warner; and Michael Jacobs, former National Security Agency director of information assurance.
Paladin Homeland Security Fund L.P. invests in enterprises with a principal business focus on products and services that address homeland security issues and needs. Paladin gives funding priority to existing companies with immediate solutions designed to prevent harmful attacks, defend against attacks, cope with the aftermath of attack or disaster, and recover from terrorist attacks and other threats to homeland security.
Trident Capital is a leading venture capital firm with more than $1.2 billion of capital under management. The firm invests in information services and software companies with a focus on business outsourcing, financial services, security, marketing services and infrastructure software markets. Trident has invested in more than 100 companies since its inception in 1993.
Solstice Capital is a seed- and early-stage venture capital company that invests in alternative energy, education, the environment, life sciences and information technology. Solstice was formed in 1995 and currently has $80 million under management.
EDF Ventures is a venture capital firm with $120 million of private equity investments under management in three venture funds. Since forming its first fund in 1987, EDF Ventures has played a leadership role in providing venture capital to emerging technology companies in the Midwest, with investments in more than 30 companies.
Purdue Research Park, operated by the Purdue Research Foundation, encompasses 591 acres in West Lafayette, Ind. With 38 buildings, the park is home to 104 businesses, of which 58 are high-tech. These companies employ more than 2,200 people.
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