Canada is about to lose ownership of one of its best-known cybersecurity firms.
SecureKey Technologies, an identity and authentication provider whose services are used by the Canadian government and leading financial institutions for login verification, has struck a deal to be bought by Czech-based antivirus provider Avast.
Its Verified.Me is a mobile app that leverages a user’s bank credentials for digital identity verification for a wide range of services. In Canada, that includes secure login to a number of government departments including Canada Revenue Agency (CRA) and Employment and Social Development Canada, or securely buying commodities through TD Bank’s Precious Metal digital store.
Last year Interac Corp., which runs a payment network here used by major credit card companies, acquired the exclusive rights to SecureKey technologies in Canada.
The companies said today they expect the deal to close early next month. No purchase price was announced. Best known as a provider of consumer antivirus for individuals and small businesses, Avast’s acquisition of SecureKey now gives it a foothold in the business market
“The maturity of the SecureKey hybrid federation, bank ID, and decentralized technology suite and history of strong operational delivery in Canada for discerning financial services and government customers and partners positions Avast for geographic expansion,” Charles Walton, Avast’s general manager and senior vice president for identity, said in a statement. Walton used to be SecureKey’s chief executive officer (CEO).
“As the European community is investing in public-private sector digital identity infrastructure in 2022 and beyond, we see Avast well-positioned as a collaborative provider of digital trust services for people, digital businesses and government. Success for us is where digital identity becomes simple, user-centric and portable, and can enable a more trustworthy digital experience and deeper online engagement benefiting both people and business.”
Avast has been buying companies for a while to bulk up in the highly competitive cybersecurity market. In 2016 it bought competitor AVG Technologies for US$1.3 billion. Last year it announced a deal to merge with Norton Lifelock for US$8 billion, however, it hasn’t been consummated yet. The U.K.’s anti-trust regulator has some concerns. Since this acquisition is on hold, Avast decided to go ahead with its acquisition of SecureKey.
Avast said it had adjusted revenue of US$892 million in 2020.
SecureKey CEO and founder Greg Wolfond said in a statement that combining forces with Avast enables SecureKey to innovate further and faster with its technology.
Wolfond is an entrepreneur who has co-founded and sold several companies. Among them was Footprint Software, a maker of financial applications for banks, sold in 1995 to IBM; and 724 Solutions, a maker of messaging solutions for wireless carriers, which went public in 2000. 724 Solutions was bought by California-based Mobixell Networks in January 2010.
Wolfond began to step back from running SecureKey in 2012 when Charles Walton was named CEO. At the time, Wolfond said he’d be concentrating on working with SecureKey customers and on the company’s technology. He added he was not thinking about the next company he’ll create, nor selling or taking SecureKey public. But he returned as CEO in 2016.
Now he will report to Walton.
”It’s a funny turn of events,” Wolfond said in an interview this morning. His return as CEO came as the company turned to a distributed identity model that gives consumers control over the use of their personal data for secure ID, explained.
Walton joined Avast last summer, Wolfond said. Late last year talks began on whether SecureKey would be a good fit for it.
Wolfond will stay with the SecureKey division “for as long as they’ll have me.” He described the acquisition as a win for Canada rather than the loss of a technology firm.
“It’s difficult to conquer the world organically with a team of 110 people who are resident in Canada” he said. “So how do you get it going in Indonesia, Germany, France and all of these places? It’s a speed to market and capability thing.”
“It’s a pretty big boost and pat on the back for Canada’s technology. We built this out, we got it working, we gave Interac an exclusive licence in Canada, and this is folks coming in and saying, ‘We love what you’re doing. Let’s take this out globally.’
“We stay here … all the data, all the people stay in Canada. We continue to make Interac a showcase, and then we take the technology to the world. It’s pretty fantastic.”
He also expects the deal will allow the SecureKey division to hire more staff.
“We envisage a global and reusable digital identity framework which will underpin a new trust layer for the internet,” said Ondrej Vlcek, CEO, Avast. “It’s clear that digital identity is the critical enabler for many digital services and SecureKey’s success reflects the growing demand for this from consumers. SecureKey is highly complementary to Avast’s prior work in Identity and together we will take our offer to the next level, accelerating innovation and working to establish a user-focused, global approach that aligns user, business, and government propositions.”
Forrester Research senior analyst Paddy Harrington said the acquisition is a strong move by Avast to expand. “They’ve been seen by many as a useful “free” antivirus solution for a long time, with a pay-for upgrade, so expanding into the digital identity and authentication market will show they’re growing as a company and providing more value. By expanding the reach of the SecureKey technology, they could bring this solution to more users and businesses and help provide that trusted authentication solution that a lot of users want when they’re online.
“This does raise questions though, as Norton has interest in merging with Avast. While this has been put on hold to answer some concerns on the competitive side, if allowed to go through, you’d be combing the AV, VPN, privacy monitoring, and now digital identity of these companies together and that could change the combined solutions into a powerful endpoint protection solution.”
This story has been updated with comments from SecureKey founder Greg Wolfond, Forrester Research, and Avast CEO Ondrej Vlcek