Ping Identity Debuts $50M Venture Fund to Back IAM StartupsPing Ventures Will Support Startups Building the Next Generation of Identity Tools
Ping Identity is rolling out a $50 million in-house corporate venture fund to support identity and access management technology startups, betting it can spot, fund and integrate cutting-edge technology into its own stack.
The Denver-based identity vendor says Ping Ventures will back new businesses in fields such as online fraud and risk services, real-time identity verification, identity and data access governance, decentralized identity, machine identity, experience automation, and dynamic authorization and entitlement.
The company's investing approach won't be the same as traditional venture capital, says Anton Papp, Ping Identity's head of corporate development. "There are strategic reasons behind why we are making investments. And because of that, there's much tighter integration with our products and back to subject matter experts in the company," he tells Information Security Media Group.
Ping Ventures will serve companies seeking seed, Series A and Series B funding and will make investments ranging from $500,000 to $5 million each. The company hopes to make between three and four investments each year and expects offer follow-up support to portfolio companies over the next couple of years, allotting $50 million (see: Cloudflare One Brings Email Security, DLP, CASB Together).
Startups that receive funding from Ping will benefit from access to the company's subject-matter expertise, go-to-market channels and executive experience. Emerging vendors will have access to Papp and other senior Ping Identity executives to better understand the challenges entrepreneurs face and to help startups address real-world issues they're dealing with in disparate areas such as human resources.
"It's a lot more than you would normally get with a traditional investor," Papp says.
Why Ping Ventures Is Starting With Allthenticate
Ping Ventures has already announced an investment in unified access control and authentication company Allthenticate for an undisclosed amount. Allthenticate offers passwordless authentication via biometrics using an enhanced Bluetooth stack. Users can obtain physical access to, say, a factory floor and digital access to a device without having to shake loose their mobile phone from its pocket hideaway.
"When I came across this company and what they've developed from an identity-centric perspective and that ability to bridge the IT and OT world, we thought it was a unique opportunity to invest in a groundbreaking startup," Papp says.
Papp is looking for investment opportunities in which a traditional venture capital firm is leading the round and providing expertise and oversight, allowing Ping Ventures to take a supporting role. Ping Ventures plans to focus on earlier-stage companies with more modest valuations so that the fund's investments provide a material ownership stake.
"Because it's a strategic fund, we intend to take it literally, which means we are focused on investments that are aligned to the overall corporate strategy," Papp says. "And while we could invest in some faraway adjacencies in the broader cybersecurity ecosystem, it's not necessarily relevant or beneficial for Ping. We want to have a nice overall corporate strategy portfolio."
What Ping Ventures Wants in a Startup
Ping Ventures wants startups that understand the market opportunity and where they fit within Ping's strategic road map and that have executives with a record of successful exits, Papp says. The fund is particularly interested in startups that intend to address something Ping itself was planning to build in the next four to five years.
Papp says the fund is also focused on how easily Ping Identity can integrate with the prospective startup. One question he wants answered is whether the startup is building products or services that an end customer would want to buy.
"It's a mix of their vision and expertise on the market with the possibility to integrate and work with what we have at Ping," Papp says.
As far as subject matter is concerned, Papp says Ping Ventures is focused on ensuring customers have a tight, smooth, optimized integration around their product offering. The fund will also examine how the startup's product road map aligns with Ping and other players in the ecosystem as well as what current and future product releases are expected to look like.
From a metrics standpoint, Papp says Ping Ventures plans to define qualitative and quantitative goals that go well beyond pure cash return and take into account other factors such as the success of the partnership. The fund's ability to facilitate tighter integrations with emerging vendors in the identity space should provide customer CISOs with smoother implementations and less downtime, Papp says.
"By us doing this fund, it provides CISOs with an ecosystem of startups whose products have been optimized on Ping," Papp says. "So for them, it takes away a lot of the uncertainty and risk associated with selecting a startup that they might not have otherwise worked with."