TrustDefender scores $16m on the back of bank wins

Australian security start-up TrustDefender has secured $16 million in investment capital from ASX-listed identity verification company Nexbis.

The landmark deal follows the signing of contracts with two tier one banks in the UK, as well as four other institutions in Europe.

The deal gives Nexbis a 50.08 per cent stake in TrustDefender, valuing the company at more than $30 million.

TrustDefender chief executive officer Ted Egan told the valuation was justified on the back of new deals.

"Some of the contracts we've got are larger than the money we've raised," he said.

TrustDefender's client base in Australia is limited to a group of around 15 credit unions, but Egan expects "some very large Australian banks" will roll out TrustDefender "in the next three months".

Established in 2005, TrustDefender offers a real-time security authentication solution that scans for malware the machine a bank customer is using to conduct online banking, and alerts them to potential security threats before they make transactions.

TrustDefender says its solution goes beyond traditional two factor authentication options such as tokens or one-time passwords sent via SMS, because it is independent of web browsers where 'man-in-the-middle' attacks can occur due to weaknesses in browser technology.

Egan says the company had interest from investors in the US and UK, but decided to work with an Australian company in order to remain headquartered in Australia.

"I have one personal bugbear, and it's watching every company run off overseas and get bought out."

Egan says Nexbis also has technology which could be further developed for the banking sector. "We think we can potentially take that into the digital world and the credit card space."

TrustDefender will use the injection of funds to incorporate in the US, an exercise Egan says will cost around $2 million. The company will also invest in hiring new sales, delivery and support staff in the US and UK, and will beef up its research and development operations in Australia.