IPO-bound Centrify raises $42M from strategics, hints at upcoming enterprise mobile products from Samsung
When it comes to security, simplicity is often the best approach. The more endpoints a company must secure the harder the task. The same could be said about user credentials. With each additional point of access, the greater the chance that a would-be attacker finds and exploits a vulnerability – it typically only takes one.
With this in mind, it comes as little surprise that Centrify, a Santa Clara-based identity management company offering a sign-on service across multiple devices and cloud apps, is attracting attention throughout the enterprise. Today, the ten-year-old company announced $42 million in Series E funding from strategic investors Samsung Ventures, Fortinet, and Docomo Capital. The round brings Centrify’s total capitalization to $94 million, adding these strategics to a list of venture investors that includes Sigma Partners, INVESCO Private Capital, Accel Partners*, Mayfield Fund, and Index Ventures.
Centrify cites greater than more than $50 million in 2013 revenue, 40 percent year-over-year, allowing it to operate at near break-even according to CMO Mark Weiner as evidence of its growing dominance within a category that IDC estimates will be worth $6 billion by 2017. The company’s more than 5000 enterprise customers include several notable brands, among them Citi, Verizon, Microsoft, Sony, Netflix, Toyota, Exxon Mobile, Johnson & Johnson, and Boeing, as well as 60 government agencies. Weiner notes that Centrify maintains customer retention rates of greater than 97 percent.
The addition of Samsung as a investor follows upon an existing partnership between the two companies, which Weiner says will soon lead to new joint product announcements. Without providing many details, Weiner alluded that Centrify will be assisting Samsung in deploying enterprise-grade mobile offerings offerings, several of which are already being tested within the market. With Blackberry looking like a dead company walking and neither Apple nor Google taking up the enterprise security torch with much gusto, this is certainly a market that’s available for the taking.
“We’ve found that strategic investors are seeing identity as the new perimeter – much like the way they viewed the firewall was 10 years ago,” Weiner says. “It’s not just BYOD today, but also BYO-apps. Apps are going off premise and are becoming a core area of security. We offer a really broad-line solution that makes employees more productive, while making enterprise data more secure.”
Recent reports indicate that strategics, aka corporate investors, have been on the rise amid the current enterprise bull market, however not everyone in the ecosystem would consider that a good thing. What this latest round does suggest is that Centrify will have multiple potential acquirers already invested in the company, should it choose an M&A versus IPO path to liquidity. Weiner hedges on that notion, however, saying, “I would hesitate to say that they’re kicking the tires.”
Despite being a full decade into building this company, Centrify has faced no pressure from its board to pursue a liquidity event, according to Weiner. “We have a really mature board,” he says, adding that “a public market exit is a natural and likely outcome within 12 to 18 months. This management team is very experienced in taking venture-backed companies public.
In terms of competition, Centrify encounters both legacy on-premise solution vendors like Qwest (Dell), Computer Associates, and CyberX, as well as single-sign on cloud mobile solutions from the likes of Okta and Ping Identity. But unlike each of these camps, Centrify is the only company to address both use cases within a single product, according to Weiner. Centrify has also spent the last two years building out its global sales and marketing operation across Europe, Asia, and Latin America, suggesting that the company is well positioned to compete in the next phase of enterprise mobile security wars.
Centrify’s latest funding seems equal parts about deepening relationships with several key strategic partners as it is about laying the groundwork for a near-term IPO. As mobile continues to overtake on-premise and desktop Web productivity in the enterprise going forward, security across these disparate more critical. Expect to hear more about Centrify, including as part of a new Samsung offering coming to enterprises near you.
(* Disclosure: Accel Partners is an investor in Pando.)
[Image via Centrify]