Date: Oct 01, 2013 Author: Bill Flock Source: bizjournals (
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Dulles-based Cigital announced a $50 million investment from private equity firm LLR Partners Tuesday, funding that will both fuel expansion for the software security firm and cash out old investors.
The deal represents a bet on the growing appetite of banks and other institutions to build their own applications in-house — either from scratch or pulling from open-source networks like GitHub. That custom software is inevitably laden with security holes, and fixing them is Cigital's core proposition.
Its offerings include a cloud-based service in which clients can submit their software for security testing, as well as a tool that will scan code for vulnerabilities as it's written, called SecureAssist.
"About half of our business is breaking software that people have sent us just to demonstrate where the holes are," CEO John Wyatt told me in an interview. "And the other half of our business is providing advice or products to help people fix it."
The funding comes on the heels of Philadelphia-based LLR opening a D.C. office, from which it plans to expand its security, defense and government services deals.
Some of that $50 million (Wyatt declined to say how much) will go to buying back shares from prior investors: Mid-Atlantic Venture Funds, Blue Water Capital and the Washington Dinner Club, who together put $4 million into the company in 2002. The financing announced Tuesday shares characteristics with another recent growth equity deal, the $80 million infusion for Reston-based analytics firm Clarabridge Inc., which also went toward swapping out old investors for new ones.
Cigital also plans to use the proceeds to broaden its client base into health care, insurance, government, media and gaming. The cash will also improve SecureAssist, and "put more automation into our testing process," Wyatt said. He said the company's headcount, which now stands at about 270, will expand to 500 or 600 over the next four years, possibly as high as 1,000.
Wyatt said Cigital has been profitable since 2005.
