Encryption startup KoolSpan raises $9.4 million

Bill Flook
Staff Reporter - Washington Business Journal

Mobile security startup KoolSpan Inc. has pulled in a total $9.4 million in two separate raises led by Security Growth Partners and TWJ Capital, CEO Gregg Smith confirmed on Tuesday.

In an email, Smith (currently overseas) said the funding will go toward enhancing sales and marketing and engineering, as well as providing general operating capital. The company first disclosed the raises this morning in two separate SEC filings.

Bethesda-based KoolSpan's flagship product is the TrustChip, a microSD card that enables voice, text and data encryption for mobile devices. The company in May landed a deal with Samsung's security arm to use TrustChip as the hardware backbone to a new smartphone security product.

The dual raises add to KoolSpan's roughly $20 million in prior venture funding, according to CrunchBase. The larger of the two, $7.4 million, is described in the filing as straight equity. The second $2 million raise is a mix of debt, options, warrants and/or other securities.

Both Security Growth Partners and TWJ Capital are previous KoolSpan investors.