Vericept Content With $12.5M

Security startup Vericept Corp. has clinched $12.5 million in new financing to support the rollout of its content monitoring and compliance products.

The company is unwilling to divulge exactly how much money it has amassed since it was founded in 1999, but Brett Schklar, Vericepts senior product and marketing director, tells NDCF that existing investors Sigma Partners, William Blair Capital Partners, Sequel Venture Partners, and Visa International were all involved in the latest round. It was led by a new investor, Globespan Capital Partners.

The Englewood, Colo., firm develops software that monitors data traffic across the network, identifies risks, and assesses compliance with regulations such as Sarbanes-Oxley and the Health Insurance Portability and Accountability Act (HIPAA). The software sits on top of a dedicated server that attaches to the spam port on a switch.

The products come as a pure software offering, although the company can also pre-install them on a Dell Computer Corp. (Nasdaq: DELL) server.

Schklar says Vericept will use its influx of cash for “fairly aggressive sales and marketing growth.” This will include expanding the company’s sales organization and launching a number of marketing programs and events.Global expansion is also in the cards, according to Schklar. “We’re doing some research and talking to a lot of people in Europe as well as Asia/Pacific,” he says. The exec predicts that Vericept will now increase its workforce from 75 employees up to around 105 by the end of the year.

Vericept, which shipped its first products in 2001, was founded by two telecom industry execs, Tom Donahue and John Conlin, although the pair are no longer operationally involved in the company. The firm’s CEO is Tery Larrew, the former CEO of Update Systems, which was acquired by Webb Interactive Services Inc. (Nasdaq: WEBB) in 1999.

For the first few years of its existence, Vericept actually went by the somewhat intriguing name of eSniff, before the decision was made to change its moniker in 2001. “That’s not the kind of name that we think could be talked about in the boardrooms of the large enterprise customers that we are going after,” says Schklar.

Schklar promises a number of product announcements this year. “We’re going to be expanding our enterprise capabilities. We’re going to be doing more with controlling data and content.”

The Vericept message appears to be getting through. Schklar says the company has already racked up 600 customers in areas such as finance, healthcare, manufacturing, retail, and utilities.He also believes that the current emphasis on regulatory compliance will work in Vericept’s favor. In the U.S. alone, he notes, there are more than 350 pending pieces of legislation concerning information privacy.

Vericept is not the only vendor playing in this space. Competitors include Tablus Inc. and Vontu Inc., while rival startup Reconnex Corp. recently took in $5.8 million in Series B funding and this week announced enhancements to its product line (see Reconnex Connects With $5.8M ).

— James Rogers, Site Editor, Next-Gen Data Center Forum