It’s Cash and clout for VistaScape

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Sunday, February 1, 2004

ATLANTA - VistaScape Security Systems’ recent $10.5 million round of funding provides the maker of surveillance image analyzing software with more than just cash to expand operations. Its lead investor brings clout in the government market.
Paladin Capital Group, which served as the major investor in VistaScape’s second round of funding, has a management roster that includes former directors of the CIA, NSA and a former deputy director of the Defense Advanced Research Projects Agency.

The venture capital firm has established a Homeland Security Fund to invest in security-related companies.

“In addition to the money, we looked for value-add,” said Glenn McGonnigle, president and chief executive officer of VistaScape. “They have the ability to open doors for us that would take us a lot longer to do.”

VistaScape already has its software installed in a number of projects, such as along the U.S. Border and at the U.S. Navy’s facility in San Diego. But Paladin Capital also understands the opportunities in the security market and technology, said McGonnigle, making it an ideal firm to partner with.

VistaScape plans to use the funds to increase engineering and marketing efforts, plus place more sales people on the street. By the end of the year, McGonnigle expects to triple sales and marketing staff, bringing the company to just less than 100 people.

Paladin Capital contributed $5 million to the Series D round of investment in VistaScape, said Mark Maloney, a principle of the investment firm. Other investors included H.I.G. Ventures, CDP Capital and Visionaria Venture Capital.

VistaScape has raised $26 million in funding, with about $16 million coming from seed money in 2000 and 2001 to start the business.

Maloney said what appealed to Paladin Capital was VistaScape’s recurring revenue component and developed technology. “We saw it as a first mover,” said Maloney.

As part of its investment, Dr. H. Lee Buchanan, a member of Paladin Capital’s strategic advisory group for the Homeland Security Fund has joined VistaScape’s board of directors. Buchanan is the former Assistant Secretary of the Navy and Deputy Director of DARPA.