Converged momentum

Imprivata closes $15 million round with SAP and others
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Sunday, June 1, 2008

LEXINGTON, Mass.--Imprivata, a converged identity and access management appliance supplier, announced this week it has closed a Series C financing round of $15 million. SAP Ventures, the venture capital arm of SAP AG, one of the largest providers of business software solutions, joined existing investors Polaris Venture Partners, General Catalyst Partners and Highland Capital Partners in the latest investment round. This investment will help Imprivata expand its reach into new markets and extend its position in the authentication management and enterprise single sign-on sector, company chief executive officer Omar Hussain said. “Continued investment is a good thing because it clearly means you’re executing your plan and creating value,” he said, while “having SAP invest, a global, top-five software company, it shows they see this as something that’s of great value to their customers.”

Hussain is quick to emphasize that it’s SAP Ventures, SAP’s venture capital arm, that has made the investment, and that there’s no direct link to SAP’s software operation. But Jennifer Scholze, partner, SAP Ventures, said, “I talked to a lot of different folks on the SAP product side, and universally the reaction was, ‘We think this is one of the most innovative solutions in the security space that’s come along in a long time.’ Then I talked to some of [Imprivata’s] customers and partners, and it was universal that this is a really big pain point [the convergence of physical and logical security], and it wasn’t just health care or manufacturing, it was public sector, technology companies--when I look at market potential, it’s great when something is a hair-on-fire solution and crosses over industries. Imprivata has both of those nailed.”

Scholze also noted Imprivata’s record of doubling sales each of the past three years and the fact that it’s passed $5 million in annual sales and over 500 customers.

SAP Ventures invests only in software technologies, Scholze said, doing roughly eight to 10 investments a year. Recent successes include MySQL, which was sold to Sun Microsystems for “a nice return,” and Interwise, which sold to AT&T. “We have a record of adding value to the companies that we invest in,” Scholze said, “whether it’s through SAP as an acquirer or customer, there are lots of examples of value that we drive.”

SAP Ventures will continue to look at the physical security space, she said: “We’re interested in anything that looks like it’s solving a big pain point and getting success with customers in the market.”