Contact: Brenon Daly
In its first-ever acquisition, LifeLock bought itself a bit of an insurance policy. The identity theft prevention player recently raised a big slug of money and handed it over for ID Analytics, an acquisition that we suspect was partly motivated by LifeLock’s plan to go public soon. How do we figure that?
On its own, LifeLock has built a powerful business since its founding in 2005. With more than two million registered users, the company recorded revenue of about $190m in 2011. LifeLock is known for its unapologetically brash marketing, including the full-page newspaper advertisements in which the company’s CEO tauntingly gives out his real social security number to any would-be identity thieves. (In the past, some of the company’s claims have landed LifeLock in hot water with regulators and consumer advocacy groups.)
Indeed, many critics have blasted LifeLock as little more than a marketing machine, one that chews through tens of millions of dollars each year to keep its consumer brand growing. With the acquisition of ID Analytics, however, some of that criticism has been knocked down. For starters, the purchase gets LifeLock into the enterprise business for the first time. (ID Analytics, which was founded 10 years ago, has 280 enterprise clients and will continue to operate as a stand-alone subsidiary following the acquisition.)
But perhaps more important than buying its way into a new market is the fact that LifeLock shored up some serious IP around identity risk management, compliance and credit analytics. Indeed, ID Analytics had been a key data provider to LifeLock since 2009. LifeLock likely paid roughly $150m (plus a bit of equity) for ID Analytics, which we understand was generating about $30m in sales. But that may be a small price for LifeLock to pay for being taken more seriously on Wall Street, if it does indeed go public.