WholeSecurity Locks Up $10M In Series B Financing

WholeSecurity, a provider of software that uses behavioral detection technology to protect against threats on PCs, plans to announce Monday it has raised $10 million in its Series B round.

New investor Parker Price Venture Capital led the round, which included participation from all of the company's Series A investors - New Enterprise Associates, Venrock Associates and Trellis Partners. The funds will be used for sales, business development expansion and marketing. In total, WholeSecurity has raised more than $20 million since it was established in February 2003.

WholeSecurity President and Chief Executive Peter Selda said the company spoke with between 20 and 25 venture firms over the course of the fundraising. "We had a profile we were looking for," he said: a firm that had already worked with one of its Series A investors; an investor with operating experience; and one that had the necessary "chemistry" to work with the company and to work quickly with a term sheet.

Selda said the company was looking for between $7 million and $10 million and decided to close on the higher end in order to "increase the acceleration of the company and to bring on more employees. WholeSecurity will add between 10 and 15 more employees to its 45-person staff.

According to Selda, all existing investors contributed more than pro-rata. The investment is expected to take the company to break-even early next year, according to Selda, who said the company's post-money valuation was up from the Series A round. WholeSecurity closed its Series A round with $8 million in March 2003.

As a result of the financing, Kent Price, founder and president of Parker Price Venture Capital, has become a board observer. The company's board includes Scott Sandell, general partner at NEA; Ray Rothrock, managing general partner at Venrock Associates; and chairman Jimmy Treybig, a venture partner at NEA and principal founder and former president and CEO of Tandem Computers.

WholeSecurity's customers include Deutsche Bank, Comerica and Raymond James Financial. The company's Confidence Online software is designed to find and eliminate threats and can protect employees both on managed and unmanaged work stations. "Essentially we are the only one today that can go to market and can find threats on managed and unmanaged endpoints," said WholeSecurity Senior Vice President of Marketing Scott Olson. The product is priced at $39 per person.

The company has an enterprise version of the software that's designed to protect a company's employees and a portal version that protects a company's online customers. Selda said WholeSecurity has focused on the banking industry, which logically led to expanding into insurance and brokerage. The company is also getting interest from healthcare and government agencies. WholeSecurity's primary geographic focus is on the US market, though it plans to begin selling into Europe and Asia next year.

For more information visit the WholeSecurity website: www.wholesecurity.com



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