Shym Closes $7M Second Round

Trying to bridge an inefficiency created by the need for speedy integration in the electronic business segment, Shym Technology Inc. of Needham, Mass., raised $7 million recently in its second round of venture financing.

Canaan Partners of Rowayton, Conn., led the transaction followed by existing investors North Bridge Venture Partners and Venrock Associates. Shym, a developer of public key enabler software, raised $3.85 million from those two firms in its first round that closed in June 1998, said company President Jim Geary.

“We are bringing a product that lets organizations integrate security software without the need for consulting,” Geary said.

To date, companies whose infrastructure required security upgrades brought outside experts in to handle the integration in order to maintain timeliness. Geary said that Shym’s product removes the need for expensive consultants, while retaining the speed companies involved in e-business require. Original customers for the software product chiefly emanate from the financial services, pharmaceutical and manufacturing sectors, although Geary said the company intends to pursue customers in any sector that required secure public infrastructure in order to execute its e-business strategy.

Proceeds from the venture round will primarily be used to hire more engineering staff to support a broadening of the company’s products, Geary said. Additional proceeds will be used to begin hiring sales and marketing staff and to implement a marketing program.

Geary said the company has no iron-clad plan for future financings, but he did note that the goal is for the new capital to fund operations for the next 12 to 18 months and carry Shym to profitability. He indicated that the next financing, likely either a third private round or an initial public offering, would be held in late 2000.