Waltham security firm Verdasys gets new chief, $12 million in funding

Verdasys employees at the recent RSA Security conference in San Francisco.
Verdasys employees at the recent RSA Security conference in San Francisco.

A security executive who sold his last startup to McAfee is taking over at Verdasys, a Waltham company founded way back in 2002. Verdasys sells software intended to safeguard sensitive data from malicious outsiders — and employees.

Ken Levine sold his last company, NitroSecurity, in 2011. He stuck around at McAfee until late last year. Then, one of Verdasys’ investors told him the company was hunting for a new CEO to replace Jim Ricotta, who had been running Verdasys for a little more than three years. Levine’s first day on the job was last Friday.

New Verdasys CEO Ken Levine.

New Verdasys CEO Ken Levine.

Levine says that until now, Verdasys has spent much of its energy focusing on what’s called data leak protection — or trying to make sure sensitive customer data or intellectual property doesn’t fall into the wrong hands. But Levine says that DLP “has left a bad taste in buyers’ mouths. It can be tough to deploy.” So he’s hoping to expand Verdasys’ offering so that its agent software, which monitors activity on devices like servers or tablets, can identify an array of other kinds of threats, like malware. “We can look at behavioral patterns on the end device and alert security analysts at the company when there’s something happening that shouldn’t be, whether because of malware or an insider threat,” Levine says.

Levine says that under the prior regime, Verdasys had “narrowed their scope so much that they shut themselves off from a few hundred million or a couple billion dollars of market opportunity.” The company sells its product as software that a company can deploy on its own, or as a cloud-based managed service. Customers include GE, Dupont, and the U.S. Department of Justice.

The company has about 125 employees, and Levine says his plan is to grow engineering by about 50 percent, and also add sales and marketing staffers.

Verdasys’ existing investors — along with Levine’s own investment fund, Brookline Venture Partners — have pumped an additional $12 million into the company. Verdasys has now raised $65 million in total.

Verdasys is now a dozen years old — well past the point at which investors start getting itchy for an exit. Most security companies in Massachusetts, if they manage to solve an unsolved problem, get acquired, as opposed to going public. And Levine successfully sold his last company to one of the industry’s big players. But asked about Verdasys’ future, he says, “I’m trying to run it as a great company that doesn’t have to get acquired.”

Scott Kirsner writes the Innovation Economy column every Sunday in the Boston Globe, in which he tracks entrepreneurship, investment, and big company activities around New England.
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