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Security - Monday, November 14, 2005

BioPassword - Profile

HQ: Issaquah, WA

Founded: 2005. Prior to that, the company operated under the name BioNet Systems since 2002.

Management: Mark DiSalle is Chairman and CEO. He was a producer of Jean-Claude Van Damme films. He also held minor acting roles in each of his five films -- appearing as a boxer in "Bloodsport" and a security guard in "Street Knight." He bought the company in bankruptcy in 2002 for just $500M. He then sold part of the company - NetNanny to Looksmart.

BioPassword's CEO Directed Kickboxer.

Investors: In November 2005, the company raised $8M in a Series B financing from Ignition Partners and OVP Venture Partners and Ignition partner. John Connors, the former CFO of Microsoft, joined the board. The company has raised $13.5M to date. Earlier investors include Benaroya Capital Co. and angel investors John Wall, Steve Moore and Brian Hill.

Business Model: BioPassword sells a software bit that tracks users software strokes to confirm or deny that a user is who he says he is. It is designed to avoid the problems associated with using traditional password security, such as internal security breaches, social engineering, password-cracking programs, and employee negligence. It works by measuring how long typists spend on individual keys and the time between pressing the next key. Just 0.04% of people who know a password are able to gain access.

It has the advantages over fingerprint and eyeball password applications as it requires no additional hardware to purchase, install, maintain, and replace. The company is targeting financial institutions and health care organizations, with about a dozen customers paying $20 to $30 per work station and an annual maintenance fee.

Competitors: There are so many biometrics companies, including Bioscript, NEC, CrossMatch Technologies, Authentec, Texas Instruments, and Motorola.

Dirt: The company recently offered a $100K prize at a Las Vegas conference to anyone who could successfully log on to a secure account with the correct user name and password. They kept the $100K. We like the product a lot, but are still unclear how BioPassword is going to be able to market it.