Bluefire Security Technologies Inc., a small Baltimore company that makes security software for hand-held wireless devices, has raised $6 million in a second round of financing from various investment funds and Maryland's Department of Business and Economic Development.
Chicago-based JK&B; Capital was the lead investor, followed by Glenwood, Md.-based Walker Ventures and the Maryland Angels Council, a private equity fund that invests in technology companies in the state. Bluefire, which was to announce the financing today, did not disclose how much each group invested.
DBED said yesterday that its Enterprise Investment Fund, which makes direct investments in emerging technology companies, invested $200,000.
Bluefire secured the financing even as funding for technology companies has slowed over the past 18 months.
In the third quarter of this year, total investment nationwide declined 26 percent to $4.5 billion from the previous quarter, while investment in software companies fell 10 percent, according to a recent survey by the National Venture Capital Association.
Formed in January 2001, Bluefire received an initial $1 million from investors in July 2001, said Mark Komisky, company co-founder and chief executive officer.
Bluefire plans to use the money to develop its next software version, implement its sales and marketing plan, and hire an unspecified number of people over the next two years, Komisky said yesterday.
The company, which has about 20 employees, moved its headquarters from Towson to the Tide Point office complex in Locust Point this month.
Although spending on information technology is down, Komisky said, "the climate is very favorable for companies focused on wireless and security, and we happen to be doing both."
The company's main product - Mobile Firewall Plus - is a software program that's designed to prevent computer hackers from gaining access to information on wireless hand-held devices, or using the devices to break into information-rich networks maintained by corporations or government agencies.
The software can be used by government agencies worried about spying and hacking, as well as large corporate customers, such as health care systems in which physicians might use the hand-held wireless devices to gain access to patient information that is private, Komisky explained.
Bluefire is releasing the software for additional testing to two potential clients: the National Security Agency and a large unnamed systems integrator.
The product's commercial launch will likely be in the first quarter of next year, company officials said.
"Our focus is on large enterprise customers who have valuable information on devices or are connecting to valuable networks," Komisky said.
"The software will block attempts to access that device or those networks," he explained.
Todd Kort, a technology analyst with Gartner Dataquest, said there's definitely a market for better software security solutions for hand-held devices than what's currently available.
"The question is whether software-based security will prevail or whether things like fingerprint recognition" will become more popular, the analyst said.