A couple years ago I wrote a paper on the security space and why I felt it was a good spot for VC. I’m going to try to start to track the buyout and see if that thesis is panning out. (I’m also going to have to find a way to watch for the companies that die.)
This week we have two companies at the far ends of the acquisition spectrum.
Dell has acquired SecureWorks.
Though terms of the deal have not been released I’ve heard rumors that the price is between 500 & 550M. With funding of 31.5M if we assume they have 30% of the company then that should be a good return for the investors 5x-6x. Of course, the investors may have a greater piece of the pie, but this is just a back of the napkin guess.
SecureWorks has been around since 1999 and appears they took funding in 2000. So 5x over 10 years isn’t great, but it is still a win.
SourceFire paid 21M for Immunet on Wednesday in a cash deal. 17M up front and 4M of earn outs. I know these guys well, so I’m pretty familiar with their fundraising efforts. They took 2M in capital, and it is likely that that investors got around a 3x in just over a year. Pretty good numbers, especially for a smaller fund where they don’t need to return 500M+ to LPs.
These companies are vastly different. A 11 year old company that almost IPO’d and a 2 year old company that was bought after just one round of funding. Investors in both will likely be pretty happy though.