- Cyber Security ￬
- Previous Exits ￬
KaSa invested in a company called Fortress in 2015 because of the growing threat of cyber attacks on companies large and small. As headlines continued to surface, more identities were stolen, more information leaks happened and dark web activity continued to rise, the need to develop a security solution leveraging some of the smartest minds in the space became clear.
Since its inception, Fortress has helped prominent companies across the world redefine and lock down their cyber perimeters, avoiding what could be disastrous attacks that not only compromise their business but also cost them millions. By 2016, Fortress became a leader in the cyber security industry, trusted by leading organizations to deliver an integrated technology and high performing team approach.
KaSa invested in WatchTower in 2015, a company that brings enterprise-level cyber protection to the home. With a powerful combination of technology and a dedicated team of experts, WatchTower is the first line of defense against Internet criminals. It gives consumers an intuitive dashboard that lets them know they are being protected, while offering control over every Internet-connected device in their own Internet of Things.
Along with increasing consumer interest, large companies are looking to integrate WatchTower into their own offerings as a way to enhance their services with a top-line level of cyber protection.
Infoguard Staffing Partners
There is a rapidly growing need to find and recruit cyber security warriors to equip cyber security and protection companies with the best intelligence and talent out there. In 2016, KaSa invested in a company to do just that. It’s currently in stealth mode, more details to come.
Digital Risk / 2013
Peter Kassabov, Alex Santos and Jeff Taylor founded Digital Risk in 2005. We realized the housing boom was being fueled by residential mortgages that were being made to anyone with a pulse - with no controls over fraud, quality and compliance. Digital Risk set out to make mortgages safe, which eventually became the company’s slogan.
While we were too late to prevent the financial crisis, we helped heal it and redefined risk management as it applies to mortgages today. How did we do this? We developed a platform that combined (D) data, (A) analytics, (P) people, (P) process and (T) technology (DAPPT as it came to be known). Essentially, we aggregated disparate data about mortgages, borrowers and properties, contextualized the data with various risk and compliance rule engines, and applied advanced mathematics to construct an algorithm that distinguishes a good mortgage from a suspicious one in seconds. Teams of mortgage experts then scour each suspicious mortgage, targeting those areas highlighted by the proprietary visualization of the algorithm’s results and the technology’s workflow engine. This DAPPT model is the subject of multiple patents pending. This solution helped our clients, including the US taxpayer, avoid more than $50 billion in losses from bad mortgages.
We managed to grow the company in the wake of the largest financial meltdown in the world’s recent history from no revenue in 2005 to $120 million-plus in 2012. The business was sold to a Hewlett Packard (NYSE: HP) subsidiary in 2013 for $202 million of which $175 million was paid in cash at closing. The exit resulted in 16x return for equity investors and management (IRR: 84%). Digital Risk continues to succeed—recently being recognized by HousingWire Magazine as one of the 50 fastest growing companies in its industry.
Connextions Health / 2006
Peter Kassabov, Alex Santos and several others founded Connextions Health in 2003. Long before the Affordable Care Act, we recognized the only way to fix our nation’s healthcare system was to align the patient’s interest with the insurer’s. Accordingly, we set out to make Connextions Health the leading solutions provider to health insurance companies by implementing preventative medicine and patient accountability initiatives.
Connextions Health’s first solution was to build the first ecommerce marketplace so insurance companies could sell their products directly to consumers over the Internet. Unlike the managers of the Affordable Care Act marketplaces, we envisioned the difficulties of selling health insurance on-line, so we established contact centers staffed with licensed insurance agents and enabled by CRM technology to provide prospective customers with a concierge-like experience at an on-line cost. The solution was recognized as the ecommerce implementation of the year in 2003 and spawned an entire industry.
From there, we expanded the platform to help health insurance companies underwrite the risk of each prospective customer. To do this, we developed analytics to predict the cost of care for each insured. We discovered our analytics were particularly adept at identifying patients at high risk for developing one or more chronic diseases. Since treating chronic diseases accounts for 85% of health care costs, we saw the next opportunity. Our team of physicians developed a proprietary spectrum of clinical protocols designed to prevent individual patients from contracting chronic diseases. Our contact center staffed with nurses and physicians then worked with providers, patients, employers and health insurance to manage the health—and coordinate the care—for each patient all in an effort to improve the patient’s life and lower the cost.
Connextions / 2006
Peter Kassabov and several others founded Connextions in 1999. Alex joined the team in 2002. In the late '90s, few companies sold their products and services over the Internet because they did not have the expertise or the funds. Peter saw the opportunity to build an ecommerce platform that many could utilize, allowing far more companies to access the potential of the Internet. In a sense, this was Amazon and the cloud as we know it today circa 1999.
By 2005, Connextions emerged as the market leader in innovative ecommerce solutions, employing more than 1,000 employees. The delivery platform combined ecommerce application management with complimentary contact center and fulfillment capabilities to deliver a turnkey, fully outsourced ecommerce solution for clients.
We grew both Connextions and Connextions Health from no revenue to more than $100 million in 2005. Both businesses were sold to a multi-billion-dollar private equity fund, New Mountain Capital, in 2006 for $145 million. The exit resulted in 29x return for equity investors (IRR of 70%) (including management). Connextions Health continued to grow and was again sold to United Healthcare (NYSE: UC) subsidiary Optum in 2012 for $350 million.