While Cleveland-headquartered Keyfactor is well-known in the North American market and channel, Swedish-based PrimeKey, while a global company, is much stronger in Europe and has had a much less robust channel presence.
Two large vendors in different spheres of the PKI [public key infrastructure] space have announced their intention to merge. U.S based PKI as-a-service platform provider Keyfactor and Swedish-based PrimeKey, which makes PKI certificate authority software and issues certificates, will merge as Keyfactor, creating what they are billing as the industry’s first machine identity management platform. The merger was facilitated by a new $125 million funding round, led by Insight Partners, who had earlier invested $77 million in Keyfactor in 2019. Financial terms of the deal were not disclosed, however.
“This is really the first merger of a certificate issuance software company with a certificate management company,” said Ted Shorter, Keyfactor’s CTO. “While the scale that IoT brings certainly makes this type of merger more compelling, it is more of an expansion on what we presently sell, a combined offering of two massively scalable stacks. Organizations are starting to look more and more to one place to get certificates and manage certificates under one umbrella. There’s certainly a case to be made for coming together even without the IoT angle – but IoT makes it a no-brainer.”
The two companies have had an established partnership
“We have been partners with PrimeKey for quite a while,” Shorter said. “Their software stack is one of the more prominent companies that offer software that can issue signature certifications. We help manage them once they are issued. We have had an integration between their stack and ours for quite some time, and through that relationship, we learned that as companies, we have similar core values, which helped bring the deal about. We have both been in the PKI space for almost 20 years. They had their start as a services company, just like we did. There are also a large number of players in the PKI space who use their software stack.”
Despite their importance in the industry, PrimeKey is not that well known in North America, although they do have a presence here.
“They are much bigger in Europe than in the U.S. although they do have a foothold here,” Shorter stated. “We are the opposite – big in North America and growing in Europe. They have had an open source software stack which is now their Community product, and they were offering services around that. Their normal Go-to-Market is less channel-focused than ours, and is much more focused on the open source aspect, although their sales success around open source stacks is something we are hoping to learn from.”
B.J. Ferguson, Keyfactor’s vice president of global channel sales and operations, said that the merger is important for Keyfactor channel partners both in terms of product, and in services and delivery.
“From what we have seen in our own partner network, a lot more customers are asking about PKI and certificate management than ever before – the highest demand we have ever seen,” he said. “Being able to offer both products as a joint solution will be a major positive.”
“With regard to services and delivery, one big thing PrimeKey offers is that open source capability, which is important around building integrations and new components,” Ferguson continued. “Keyfactor is making a move to be more open source so partners can contribute to the product. This extension of open source will touch more parts of the organization, and the ability of partners to offer more parts of services will be greater than ever before.”
PrimeKey’s strength in the IoT space is also important, especially for systems integrator partners.
“A lot of the global SIs are building huge practices based on IoT,” Ferguson said. “In terms of what they want, this merger brings together a very good story for the global SIs around IoT specifically.”
The companies are announcing that the PrimeKey staff is all coming over to Keyfactor, with PrimeKey CEO Magnus Svenningson becoming Keyfactor’s chief strategy officer and EVP of business development. Jordan Rackie, Keyfactor’s CEO, will remain the CEO of the merged company. The transaction is expected to close within the next 90 days, pending approval by the Swedish authorities.
Looking forward, Shorter said to expect some new synergies from the combined company.
“I think there are more pieces to be offered, especially in the IoT space,” he said. “PrimeKey also has some interesting new certification formats, and new protocols being used in places like the automobile industry. More combinations of PKI and cryptography at enterprise scale are also likely.”