Bharosa Bags Bucks, Phoils Phishers

Security startup bags $1M to take its authentication story to government and e-commerce

July 8, 2005

3 Min Read
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Bharosa Inc., a startup claiming its security software for service providers and enterprises has already made it profitable, just clinched $1 million in funding.

Jon Fisher, Bharosas CEO, told NDCF that the Series A round was led by some of the company’s customers, including the University of California, San Francisco and application service provider (ASP) Citadon Inc.

Founded in 2003, Bharosa’s story is all about helping service providers and other enterprises secure customer data. Businesses are coming under increasing pressure from attacks such as phishing and trojan horses, which can record the keystrokes used to enter passwords on computers. This data can then be used for fraudulent purposes (see Report: Employees Fall for Phish and Beware of the Trojans!).

The Santa Clara, Calif.-based vendor believes that it has the answer to this problem in the shape of its v.Crypt software. Bharosa’s v.Crypt Authenticator uses a set of keyboard-style images that appear on the screen of end-user devices such as PCs and laptops. Users deploy a mouse instead of a keyboard to enter their passwords.

Foster told NDCF that Authenticator offers an additional layer of security by using a software agent to encrypt data sent from the end-user device. Another agent, which typically sits behind the firewall in a customer’s data center, then uses a set of algorithms to decrypt the data.To date, the company has racked up 12 customers in areas such as financial services, healthcare, and e-commerce, according to Fisher. Six of those are currently in beta testing. A further 12 organizations are involved in “some form of trial” with Bharosa’s technology, he adds.

The CEO says the new funding will help Bharosa expand its workforce and target new markets, such as the government sector. The company also plans to expand its presence in the e-commerce space. Bharosa has 24 employees and will increase that to between 50 and 75 within a year. Three-quarters will work in product development, and the remainder will be in sales and administration, Fisher says.

But Bharosa, despite claiming a unique approach to tackling online fraud, is not the only vendor concerned with the phishing threat. The startup finds itself up against established vendors such as RSA Security Inc. (Nasdaq: RSAS), Symantec Corp. (Nasdaq: SYMC), and VeriSign Inc. (Nasdaq: VRSN).

Undeterred, Fisher says the newcomer’s message is getting through. “We’re starting to win business,” he says. “ASPs, financial services, and healthcare are proving to be our core markets.”

The firm also reached profitability recently, and Fisher does not anticipate going out for another funding round. “We do not see the need to sell any additional pieces of the company."Bharosa was founded by Thomas Varghese, who also set up NetClerk Inc., a forms-based transaction company that developed middleware, compliance, and security products for the construction industry. NetClerk was sold to construction industry search engine BidClerk in 2002. Varghese is now Bharosa’s CTO.

— James Rogers, Site Editor, Next-Gen Data Center Forum

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