Cardholder security is a critical issue for the retail industry. The incorporation of this technology into the VeriFone product set will raise the bar at the point of sale in combating criminal efforts to target gaps in card processing systems.
San Diego, CA (PRWEB) October 30, 2007
Semtek Innovative Solutions Corporation announced today the closing of its Series A round of equity financing. RRE Ventures and Venrock co-led the financing and were joined in the round by strategic investor VeriFone Holdings, Inc. (NYSE: PAY).
Semtek is commercializing a point of sale device hardware component that eliminates the need for payment card data to be used or stored within merchant’s payment systems, thereby eliminating the risk of data breaches related to inadequate merchant level security.
Semtek’s technology enables a massive improvement in security for the payment card industry, a sector that has been hit very hard by data security compromises over the last several years. Semtek’s technology is highly promising because it can be implemented with virtually no disruption to merchants or the broader payments networks and yet delivers an unprecedented level of security at a very low cost. The technology also enables the identification of counterfeit cards in real time, a decisive tool for combating card counterfeiting. Semtek’s device, known as the Cipher Security Module©, provides an additional array of real-time security metrics that evaluate the empirical security of each transaction as it occurs, a major improvement over analytics-based systems that evaluate card usage patterns looking for clues that a card may be stolen or counterfeited.
Patrick Hazel, Chief Executive Officer of Semtek, noted that “Venrock and RRE are obviously ideal investment partners to help us introduce a game changing technology into the financial technology space, a sector with massive opportunity, but with tough hurdles for adoption. These two firms combine experience, relationships, and access to global customers that will be pivotal to our success. Critically, VeriFone brings us immediate access to key markets and distribution and has the team on board to help us deploy these technologies the right way.”
Douglas Bergeron, Chairman and Chief Executive of VeriFone, said ”Cardholder security is a critical issue for the retail industry. The incorporation of this technology into the VeriFone product set will raise the bar at the point of sale in combating criminal efforts to target gaps in card processing systems.”
“Semtek’s technology enters the market just as the card payments industry is coming to grips with its massive security vulnerabilities,” commented Rich McGinn, general partner at RRE Ventures. “Because Semtek’s technology can resolve security risks associated with credit card data prior to that data touching a retailer’s systems, we believe it is the most practical means of securing card payment systems available.”
Mike Brooks, general partner at Venrock, added “The Semtek solution deals with a critically important security problem in the credit card industry that others have not been able to address in a cost effective way. We welcome VeriFone as an important partner and investor in building this business.”
As part of this transaction, Mr. McGinn, Mr. Brooks, and Mr. Bergeron will join Chairman John Sarkisian and existing director Patrick Hazel, Semtek’s Chief Executive, on Semtek’s board. Semtek was advised in this transaction by Sparring Partners, an investment bank that specializes in the technology-enabled sector.
About RRE Ventures:
Since its founding in 1994, RRE Ventures has been dedicated to helping talented management teams build leading companies in the software, communications, and financial services industries. With $850 million in assets, the firm backs entrepreneurs and management teams that possess the knowledge, vision, and discipline to create market-dominating companies. RRE's team offers a unique combination of management, operations, and investment expertise, as well as an unrivaled network of relationships that has helped build over 90 companies. For more information, visit http://www.rre.com.
Venrock is a premier venture capital firm with offices in Menlo Park, New York, Cambridge, MA, and Israel. Originally established as the venture capital arm of the Rockefeller family, Venrock continues a seven-decade tradition of partnering with entrepreneurs to establish successful, enduring companies. Having invested $1.9 billion in 400 companies resulting in over 120 IPOs over the past 38 years, Venrock’s investment returns place it among the top tier venture capital firms that have achieved consistently superior performance. With a primary focus on technology, healthcare, and energy, portfolio companies have included Apple Computer, Centocor, Check Point Software, DoubleClick, Gilead Sciences, Idec Pharmaceuticals, Illumina, Intel, Millennium Pharmaceuticals, Sirna Therapeutics, and StrataCom. For more information, please visit Venrock’s website at http://www.venrock.com.
About VeriFone Holdings, Inc.
VeriFone Holdings, Inc. (“VeriFone”) (NYSE: PAY) is the global leader in secure electronic payment solutions. VeriFone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. VeriFone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide.
Semtek Innovative Technologies Corporation has been a leader in magnetics technology since 1999, serving large public and private sector customers who require secure data capture components for their fixed-base and wireless devices. Specializing in small form-factor data capture devices in magnetic stripe, smart-card, RFID, and biometrics, Semtek is a key OEM partner for companies such as Symbol, Motorola, and Intermec Technologies. Semtek is headquartered in San Diego, California. For more information, please visit Semtek’s website http://www.semtek.com.
About Sparring Partners
Sparring Partners Capital is a licensed broker/dealer investment banking advisory firm with a focus on privately-held growth companies in the services, software, and enabled technology sectors. Sparring Partners assists private companies in raising capital (debt & equity), sell-side advisory, as well as assisting private equity firms raise their next fund. Sparring Partners' successful track record and its broad experience in the industry has gained a strong reputation among top U.S. and European private equity firms, debt lenders, and strategics. The firm closed eight transactions in 2005 and fourteen transactions in 2006.
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