Under the agreement Cloud Security Corporation will hold a one year option to sell the stock to Kodiak to fund expansion as well as for general corporate purposes. Kodiak will not take an active role in the operation of the company.
Cloud Security Corporation, which offers MyComputerKey among its remote access security devices, changed its name in May from Cloud Star Corp to reflect the company’s focus on security.
“Kodiak shares our opinion that Cloud Security Corporation is well positioned in the rapidly developing internet security sector,” Safa Movassaghi, chief executive officer Cloud Security said in a statement. “With this capital infusion we will continue to develop and deploy innovative technology that improves cybersecurity.”
Kodiak Capital Group is a California-based institutional investor which makes non-control equity investments is a broad range of industries. Ryan Hodson, managing director of Kodiak said, “we are happy to add (Cloud Security Corporation) to our growing disruptive technologies portfolio.”
The rapid growth of cloud computing, and corresponding concerns about cloud security, have prompted investment in the field. The National Science Foundation recently announced major grants for cybersecurity research, one-third of which are cloud-specific. Secure cloud hosting provider Firehost raised $12 million in June, and Google Apps management and security provider Bettercloud raised $5 million to fund expansion earlier this year.
Cloud security firms have also been targets for acquisition. Within the past month Alert Logic was purchased by a private equity firm and Trusteer was acquired by IBM.