Long-distance duo take wraps off their second cybersecurity startup
The 5,500 miles between Boston and Tel Aviv don’t hamper the 11-year partnership between Rakesh Loonkar and Mickey Boodaei in any of the ways you’d expect from a long-distance relationship. Though they see each other only every few months, there is no jealousy, no lack of communication or support, no shortage of trust. Instead, the pair packs one of the most powerful one-two punches in the cybersecurity industry, and on Wednesday they will formally launch their second startup together.
Transmit Security, funded with $40 million of the cofounders own capital and based in Boston and Tel Aviv, is aiming to disrupt the large and rapidly growing market for software that validates the identity of users before allowing them access to websites run by banks and other companies.
“Authentication and identity is a huge market in which there really hasn’t been a lot of innovation,” Loonkar said.
Transmit Security’s software platform has already been adopted by several major banks, health care providers, and other large enterprises. One of its newest customers: TD Bank, which signed on in late 2016.
“Transmit is a very agile way to seamlessly and continuously strengthen our authentication,” said Rizwan Khalfan, executive vice president and chief digital officer of TD Bank in Toronto. “The software allows us to continuously build new mechanisms to authenticate without having to go in and rip apart what we’ve done previously.”
Transmit says customers can quickly plug its technology into their existing systems, and that its software combines the historically separate functions of authenticating users and preventing unauthorized users from gaining access.
For the consumer, Transmit says this means considerably less hassle: no more declined cards when you’re more than a few hundred miles from home, no more locked accounts when you can’t remember the name of your first-grade teacher, no more painfully long hold times when you need an actual human banking associate to unclog the works.
Moreover, Transmit says its system can turn your smartphone into a universal authenticator, eliminating the need for passwords through the use of eye, face, voice, and fingerprint recognition and one-time passwords.
Loonkar and Boodaei are funding Transmit with money made from the sale of Trusteer, a fraud-prevention tech company that Boodaei started with Loonkar in 2006. International Business Machines Corp. bought Trusteer for more than $850 million in 2013.
Their careers trace the rise of the booming cybersecurity business.
Loonkar graduated from Rensselaer Polytechnic Institute with a chemical engineering degree, then switched gears, landing a job at Pfizer Inc. installing Lotus Notes on the drug company’s computers. He later founded the network security company OneSecure, which was acquired by NetScreen Technologies and then Juniper Networks.
Boodaei spent six years in the Israeli military, studying civilian cybersecurity technologies and their implications for military networks, and managing large cybersecurity projects. In 2002, he cofounded Imperva, a database security company that now has a market value of $1.3 billion; he left in 2006.
Though on different continents, the two crossed paths, at least virtually, several times early in their somewhat parallel careers. In the winter of 2006, they were reintroduced by mutual venture-capitalist friends who thought the two — both forward-thinking, modest mavens of cybersecurity, both in their early 30s and millionaires many times over — might be interested in working together.
They met on a chilly morning at New York City’s famed Balthazar Restaurant, in what unfolded like so many Internet-initiated blind dates. Boodaei sat, drinking his coffee, armed with a photo he had found of Loonkar online. Loonkar arrived his customary 10 minutes late and approached Boodaei, hand extended, a wide grin on his face.
“I had no idea who he was,” Boodaei recalled. “The guy in the picture was thin with a lot of hair and this guy was bald and a bit chubby.”
Boodaei also made a lasting first impression.
“He was wearing a white jacket with fur on it,” Loonkar said. “He looked like a pimp.”
The partners said Trusteer was a rousing success for a small technology startup based on two continents.
“Mickey is in Israel and I’m here, and there are things you just can’t communicate, things that don’t translate when you’re not physically there,” Loonkar said. “I think the defining part of our relationship is this amazing trust where we just defer to each other on every decision. We challenge each other to support each other.”
To Loonkar, a Boston-based company makes perfect sense over cybersecurity hotbed Silicon Valley; the majority of Fortune 500 companies, along with many banks and other large enterprises, are headquartered within a three-hour flight from Boston. It is also closer to Europe, and keeps Loonkar close to his wife, who is a pediatrician at Boston Medical Center. “Basically, my wife ordered me to live here.”
Without venture capital, though, Loonkar’s wife is the only person he has to take orders from. David Fialkow, cofounder of the Boston-based venture capital firm General Catalyst, tried to invest in Transmit when Loonkar, a friend, first told him about the idea.
“They want to build their business their way, without any obligations to anyone,” Fialkow said. “As much as I’d love to be involved with them, this is as good a team as ever has come to market. They have all the money they need, they have the gravitas and the credibility, and they have the wherewithal to make this work.”