Booz Allen Ventures, TPG detail their newest tech company backings

Booz Allen Ventures

Booz Allen Hamilton's venture capital arm has backed Second Front Systems, a developer of cloud-based software for national security programs in the U.S. and allied countries.

Second Front had already completed a Series B funding round of $40 million in the fall, a move that doubled the total capital raised since its 2014 founding to $80.1 million. Booz Allen Ventures made its investment through a separate transaction announced Tuesday, of which the terms were undisclosed.

NEA, Moore Strategic Ventures and AEI Industrial Partners' HorizonX fund are among the most prominent investors in Second Front.

For its part, Booz Allen will use Second Front's flagship Game Warden agile development product to test and evaluate software in secure environments.

One of Booz Allen's ideas behind this collaboration is to speed up the implementation of security and compliance controls in commercial software, and therefore the overall accreditation process.

“The U.S. government spends more than $100 billion annually on information technology to modernize federal cloud infrastructure and deliver mission solutions,” Julie McPherson, a Booz Allen executive vice president leader of the firm’s digital solutions business, said in a release. “Accreditation of new software applications typically takes two years and approximately $1.5 to $2 million to obtain an authority to operate."

TPG

This global investment firm added a significant U.S. government cyber footing back in the summer when it acquired the Forcepoint public sector business for approximately $2.45 billion.

Now TPG is embarking on another investment with a government footing through its acquisition of majority ownership in Sayari, whose software supports counterparty and supply chain risk intelligence functions for government and certain commercial customers.

TPG said Tuesday its investment in Sayari has a potential $228 million value and is being made through the firm's middle market and growth equity arm. Sayari's founders, employees and existing investors will retain their minority stake.

Sayari touts its platform as being used by government agencies in the regulatory, law enforcement and national security domains. The commercial customer base includes at least 100 large public and private companies that include financial institutions.

In the fall, Sayari was awarded a $7.8 million contract to provide its product to the U.S. Customs and Border Protection agency in support of efforts to identify illicit shipments and forced labor violations.

“This strategic partnership marks a crucial milestone in Sayari’s journey to revolutionize the landscape of risk intelligence technology as we launch our second product, a new fully automated supply chain screening platform leveraging our industry leading knowledge graph alongside cutting edge technologies," Sayari's co-founder and chief executive Farley Mesko said in a release.

Goldman Sachs acted as financial adviser to TPG, for whom Kirkland & Ellis worked as legal counsel. William Blair was financial adviser to Sayari. Manatt, Phelps & Phillips was the legal counsel to Sayari.