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Semtek Announces Closing of Series A Financing |
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Semtek Innovative Solutions Corporation announces 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.
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.
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.
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 www.rre.com.
About Venrock
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 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.
About Semtek:
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
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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