Lake Forest-based identification technology company Ethentica Inc. got some of its own authentication last week,$40 million in fifth-round financing.
Safeguard Scientific Inc., XL Vision Inc., Hewlett-Packard Co., Amdahl Corp. and Greenhill Partners LLC together invested $25 million in Ethentica. Additionally, HP plans to provide the company with up to $15 million under a convertible debt arrangement.
“Our intent is to go public,” said Ethentica President and Chief Executive Doug Antone, who declined to say when the company plans to do an initial public offering. “All of them believe we have the business model that could lead us to an IPO.”
The funding will be used for more product development, marketing and internal growth, Antone said.
The company also is on the move, literally. It expects to sign a deal within a few days for a 35,000-square-foot facility in Aliso Viejo that’s about 40% larger than its current quarters. It also plans to expand its employee count from its current 85 to 125.
“We have lots of openings,” Antone said.
Ethentica makes devices that allow people to verify their identities, whether through passwords, smart cards or fingerprints.
“Companies want to authenticate their own employees, suppliers and customers into their e-world,” Antone said. “Most companies have identified that their security is not strong enough. You don’t know for sure who is on the other end of that e-mail.”
The company’s investors also are playing a role in implementing and introducing Ethentica’s products. Amdahl and HP plan to manage pilot programs using Ethentica’s products with emphasis on the banking, financial brokerage, insurance, and business-to-business exchange markets.
It’s a market where potential competitors, such as VeriSign Inc. of Mountain View, are doing well.
The company was founded in 1997 under the name Who?Vision Systems Inc. by Alex Dickinson, who previously was director of business development at Lucent Technologies Inc. There, he led the development of new ventures based on Bell Labs technologies, including biometric security, network operating systems and digital imaging.
Antone, who joined the company in December 1999 as CEO, came from Santa Ana-based Ingram Micro Inc., where he was a division president. Antone founded the computer systems division called Ingram Alliance, growing it from inception into $3 billion in annual sales in a three-year period.
Antone said he jumped to the Lake Forest company because it had technology patents.
“I felt very good about the technology. I didn’t want to join a dot-com that didn’t have a defensible position,” he said.
The company recently hired Mike Walthall, vice president of finance and chief financial officer, who previously was vice president and CFO at Geneva Funding Corp., a company in the mortgage industry. Another top official is Mark O’Hare, chief operating officer whose career includes a stint as CEO for the U.S. government’s $25 billion Aircraft Carrier Program.
Antone said the company went through a restructuring earlier this year, which included changing its name to Ethentica.
“We needed a broader name for the organization,” he said.
During the summer the company began shipping its first product, the Ethenticator MS 3000. It is a touch-verification PC Card with a patent-pending pop-out fingerprint sensor. Ethentica and Philips Flat Display Systems, a business group of Royal Philips Electronics NV, have incorporated the technology into a thin postage-stamp size glass engineered by Philips.
In August, Kingston Technology Co. of Fountain Valley announced it will sell a new line of touch-verification products using Ethentica’s TactileSense technology.
“It will offer our customers reliable protection from unauthorized use and data theft.” said Chris Wong, a Kingston marketing director. n
