RECONNEX SECURES $5.8 MILLION IN SERIES B FUNDING
Norwest Venture Partners and Outlook Ventures
Lead Significant Up-Round
MOUNTAIN VIEW, Calif., December 13, 2004—Reconnex, a leader in safeguarding enterprises against information security breaches originating within their organization, today announced it has raised $5.8 in Series B funding, bringing the company’s total financing to $11.3 million. Existing investors Norwest Venture Partners and Outlook Ventures co-led the round. Reconnex will use this investment to strengthen its sales and support organization and to expand its development staff.
Intellectual property loss has serious implications for corporations today—diminishing competitive advantage, straining public trust and shareholder confidence, and even inviting legal sanctions for noncompliance with regulations such as Sarbanes-Oxley, HIPAA, and the Graham-Leach-Bliley Act (GLBA). Recent high-profile exposures involving source code and credit card leaks have been traced to trusted insiders, many of whom acted out of ignorance to corporate policy. Gartner Group estimates that by 2008, insiders will account for the majority of financial losses resulting from network misuse.
Reconnex’s inSight platform provides real-time comprehensive visibility into the information leaving a corporate network to identify and prevent disclosures that can cause devastating financial losses and irreparable competitive damage.
"While in the past, companies have invested in perimeter security to protect their intellectual property and electronic assets from external threats, the vast majority of information security threats come from within the enterprise," said Matt Howard, partner at Norwest Venture Partners. " Reconnex’s inSight platform provides real-time detection and response to data security risks to help corporations protect their intellectual property and achieve a proactive compliance strategy with regulatory standards and corporate security policies."
"With our e-Risk Rapid Assessment program, in 48 hours we can deliver a report that shows what types of sensitive data is leaving a corporate network and if it is putting a company at risk. For example, when we report that source code, customer lists, or sensitive sales proposals are leaving a company’s network and going to a competitor, senior executives know they need to do something about it immediately. But there are new ramifications that senior level executives are just considering. Under today’s compliance standards, executives can be personally liable if unauthorized disclosures of sensitive information that affect the company’s value and viability leaves the corporate network inappropriately," said Donald J. Massaro, CEO of Reconnex. "The venture capital community realizes the magnitude of these threats to a corporatation’s competitive advantage and the business need for top executives to protect their liability under new compliance regulations. We had several outside investors knocking at our door and were offered more money than we needed. But at the end of the day our existing investors, Norwest and Outlook, outbid the competition and drove up the valuation of the company."
The Reconnex inSight platform is a hardware-based electronic risk management solution that works in real time to help companies guard against information disclosures that originate within their organization. The Reconnex solution can analyze more than 150 different types of content objects where a company’s intellectual property resides, including graphic content like CAD/CAM engineering drawings, and can be deployed anywhere in an organization, regardless of file formats, user sophistication, network protocol, application type, or network typology. With real-time monitoring and detection of electronic risks, companies across various industries and government agencies can protect their electronic assets and have the demonstrable proof that they are in continuous compliance with corporate and regulatory policies.
"Outlook Venture's CIO Council and Roundtable programs involve over two dozen CIOs. These groups inform us on the top priorities and concerns for IT organizations, and security and corporate governance/compliance continue to be on the top of this list," said Randy Haykin, managing director at Outlook Ventures. "Reconnex's inSight platform addresses multiple market needs, such as compliance, moving information security beyond the firewall, and protecting a company's competitive advantage. The combination of business expertise of this caliber from the Reconnex founding team, mixed with their strong technical talent, is rare in a start-up, but puts Reconnex in a strong position to succeed in what I believe is a very large market opportunity."
About Reconnex
Reconnex enables companies to guard against information security breaches that originate within an organization. By pioneering the only enterprise security platform of its kind that has the capacity to run at gigabit speeds, is non-invasive and can be deployed in hours not weeks; businesses now have a realistic and cost-effective solution to assess their operational and compliance risks. With Reconnex, companies across various industries and government agencies now have the demonstrable proof they need to show they are in continuous compliance with real-time monitoring, detection and reporting of compliance risks. For more information, visit us on the web at www.reconnex.net or call 1-866-940-4590.
