Transmit Security Becomes Cyber’s Latest Unicorn After $543M Series A

Israel-based Transmit Security hit a pre-money valuation of $2.3 billion after raising a $543 million Series A.

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The round was led by Insight Partners and General Atlantic, with additional investment from Cyberstarts, Geodesic, SYN Ventures, Vintage and Artisanal Ventures. It is Transmit’s first outside funding round and the largest Series A in cybersecurity history, according to the company.

Transmit is taking on the problem that hounds millions of people every day — remembering passwords. While the company has helped large enterprises with passwordless authentication since being founded about seven years ago, it was just earlier this year that it debuted its BindID solution — a more condensed version of the company’s passwordless technology that requires no customer software or dedicated hardware and can be used across any device.

This is not the first go-round for the company’s founders — CEO Mickey Boodaei and President Rakesh Loonkar. In 2006, the two founded fraud protection company Trusteer, which was sold to IBM for a reported $1 billion. While Trusteer was focused on fraud, that was also when the shortcomings of passwords became apparent to the two as a lot of fraud and account   takeovers are due to corrupted passwords, Boodaei said.

“The opportunity to get rid of passwords has been our vision for the last 15 years,” Boodaei said.

Bootstrapped, but big

Transmit does not offer detailed financials, but Boodaei said the company has many dozens of large brands as customers and ARR of around $100 million. The 200-person company decided to raise the newest round primarily to increase awareness around itself and the market, not because of a particular need, Boodaei said.

Matt Gatto, managing director at Insight, said his firm had been following Transmit for about five years.

“When the guys told us earlier this year they thought it may make sense to bring on an investor sometime in 2021, we pounced at the opportunity because we had done a bunch of work previously and knew it was a special business,” he said.

There are many factors that make Transmit a sweet spot investment for Insight, including the teams, the fact Insight is a very active investor in cybersecurity and has spent a lot of time in the identity space.

The identity market

Transmit’s newest consumer-facing product allows brands to quickly — in just hours — go passwordless. When consumers visit a site on either their mobile device or laptop, they can log on through face or fingerprint identification. If their laptop does not support such technology, the consumer will be directed to use their mobile device.

While Transmit sees a large growing market, it is not the only company in the identity space. Large companies, both public and private, such as Okta and ForgeRock among others, also occupy the space. In March, Okta pulled off one of the largest cyber deals in recent memory when it bought Bellevue, Washington-based Auth0 for $6.5 billion in stock.

However, with estimates hat the identity market already is around $60 billion, Boodaei said Transmit is not looking to sell and has no doubt it can continue to be built into an even larger independent company.

“This market is huge,” he said. “There is space for more vendors and we have established ourselves as a player in this market.”

The new financing should only help.

“This market is so big,” Loonkar said. “This is an inflection point, and this is a step for us to move faster.”

Illustration: Dom Guzman