Early-stage cybersecurity software company AppVision is in the market, aiming to lock down either a PE-backed or pure-play strategic buyer, sources familiar with the situation told PE Hub.
AppVision’s proprietary software, HackGuard, offers threat detection for mobile app developers along with app base monitoring. The company, which is being advised by mid-market investment bank Berkery Noyes, launched a sale process about two months ago, sources added.
The process is targeting PE firms with cybersecurity companies in their portfolio. That includes players like ABS Capital Partners‘ GuidePoint Security, BlackRock-backed Lookout, Clearlake Capital Group’s Ivanti, as well as One Equity Partners-backed Verimatrix, one source said.
“They would [mainly] buy it for the intellectual property rights,” said the source, referring to potential strategic buyers or portfolio companies looking for tuck-ins.
While a potential valuation is unclear, mobile device management businesses and companies looking to fill a security gap are the ones most likely to pay a good price, the source said.
AppVision did a reorganization in preparation for this sale process and sources say that its EBITDA is minimal.
“They [executives] are looking to exit because they don’t want to spend one to two years developing the infrastructure and then go out into the sales cycle; it’s basically to sell it now or wait for three years and they don’t want to wait,” the source said.
Founded in 2015, the company raised $2.2 million in venture funding from The Cambria Group, Sage Venture Partners and Darling Ventures with participation from AI8 Ventures in 2017.
AppVision founder Norm Klapper, who’s looking to retire with this exit, is a seasoned entrepreneur in the cybersecurity space. Prior to AppVision, Klapper set up two security businesses – Group1Internet and Entercept Security Technologies. He sold the latter to security software giant McAfee – then known as Network Associates – for $120 million in 2003.
AppVision’s clients, according to sources, include a state lottery application and an electronic health records company.
Headquartered in Tampa, Florida, the company’s SaaS solution, HackGuard, provides clients with accurate information about end-user devices, operating environment and demographics. It also shows the geographic distribution of all the app installations.