Identity & Access Management , Security Operations

Identity Startup Semperis Raises $125M to Aid Product Growth

An identity-driven cyber resilience startup led by an Israeli Navy veteran received $125 million to accelerate product development and engineering efforts to meet market demand.

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Semperis said the growth financing from J.P. Morgan and Hercules Capital will support the release of new product extensions and provide dry powder for potential future mergers and acquisitions, said co-founder and CEO Mickey Bresman. The New York-area company wants to maintain 70% year-over-year growth rates and prepare for a potential initial public offering with experienced leaders and investors.

"We're trying to accelerate and meet the strong market demand that we're seeing from our customers," Bresman told Information Security Media Group. "So, we want to make sure that we can deliver even faster on the different needs that we're seeing coming from the market."

Semperis was founded in 2014 and has been led since inception by Bresman, who previously established the Israeli Navy's computing technical expertise and knowledge center during his three years of service. The growth financing comes two years after Semperis closed a $200 million Series C funding round led by KKR to expand geographically and protect additional cloud applications and cloud identity providers (see: Semperis Raises $200M to Extend AI, ML to Identity Security).

Is an IPO in Semperis' Future?

The firm opted to work with J.P. Morgan and Hercules this time around due to their strong reputation, personal touch and publicly traded status, which Bresman said aligns with the company's future goals. Semperis is also expanding its C-suite to build a mature, IPO-ready organization, bringing in leaders across areas such as finance, go-to-market and legal with public company experience, according to Bresman.

"You cannot go wrong with having two powerhouse names like J.P. Morgan and Hercules," Bresman said. "The fact that both of them are actually publicly traded companies was an important factor for me as well."

Even in mercurial markets, Bresman said, companies can successfully go public if they maintain growth while demonstrating either profitability or a clear path to it within the next 18 months. Semperis has quadrupled its annual recurring revenue since its May 2022 Series C funding, which Bresman said has resulted in a 50% to100% valuation increase due to a decline in valuation multiples since 2022 (see: Why Semperis Added Gen. Petraeus to Its Advisory Board).

"Good companies can go public in not necessarily the most amazing markets," Bresman said. "But the companies that are going public need to rethink what it is that the public market investors are more focused on."

Bresman said customer feedback drives the company's product road map, and Semperis is set to release multiple product extensions within the next 30 days. Client input fueled both Semperis' focus on the permission-defined perimeter as well as its recent partnership with Veritas to address security issues related to ransomware by ensuring the integrity of the backup and recovery process, Bresman said.

"Can you help me identify which assets of Veritas I have in my environment? And then help me understand who has access to those assets? And then - and this is where it becomes more critical - help me understand who has access to those that have the access?" Bresman said.

Promoting the Permission-Based Perimeter

The permission-based perimeter concept involves security identity, resources and access in a modern, cloud-based environment, Bresman said. Remote work means that people accessing cloud applications are no longer behind a firewall, which Bresman said has forced organizations to focus more on who has permissions to what as well as the connection between identity resources and applications (see: Identity Systems: Attackers' Keys to the Kingdom).

"Identity is the way that you will be protecting the rest of the organization," Bresman said. "And that's what we refer to as the permission-defined perimeter."

The new Veritas pact is part of a broader push by Semperis to expand its tech alliances and partnerships, and the firm is hiring a dedicated person to oversee practical and beneficial integrations for customers, he said. Some 25 of the 30 roles open at Semperis address engineering or product-related activities, and filling these positions will allow Semperis to accelerate development and better meet client demands.

"If a partner is doing something incredibly well and can be helpful to what we're trying to achieve, it makes sense to partner rather than build it ourselves," Bresman said.

A shift in investor preference from potential to performance has presented Semperis with numerous opportunities for mergers and acquisitions, and Bresman said Semperis is examining the technology, cultural fit and impact on strategic goals of potential partnerships or acquisitions. Semperis is developing metrics to assess the effectiveness of its R&D efforts, and it remains focused on profitability and growth.

"We're starting to gather more information on, 'What KPIs do you put around a development's effectiveness?'" Bresman said. "I strongly believe that if you can't measure that, then you cannot improve it."