Imprivata Seeks $115M IPO, Growth in Health IT Security

It has been a long road for Imprivata, but the software company is finally showing its hand in its bid to go public.

The Lexington, MA-based access-security firm has filed its S-1 paperwork for a proposed $115 million IPO. If all goes well, Imprivata will trade on the New York Stock Exchange under the ticker symbol “IMPR.”

The company was founded in 2002, out of Polaroid’s startup incubator, based on identity management and user authentication software. It found a market niche in healthcare in recent years as the health IT sector has boomed. Now Imprivata is best known for its software that helps doctors access IT systems and patients’ electronic health records in a fast, secure way, using single sign-on technology.

As of the end of 2013, the company says its software is used in 18 percent of U.S. hospitals and in 150 healthcare organizations outside the U.S. (including Canada, Europe, and Australia).

Imprivata reported revenues of $41.4 million in 2011 ($2.7 million profit), $54.0 million in 2012 ($1.0 million profit), and $71.1 million in 2013 ($5.5 million loss).

The company’s investors have included General Catalyst Partners, Highland Capital Partners, Polaris Venture Partners, and SAP Ventures. Imprivata said it had raised about $50 million as of 2011. The most recent funding round appears to be a $15 million Series C in 2008.

Venture capitalists have a big stake in the outcome of Imprivata. General Catalyst, Highland Capital, and Polaris Partners each own 25.3 percent of the company. The biggest executive stakeholders are founder and CTO David Ting (4.4 percent), CEO Omar Hussain (3.5 percent), and CFO Jeff Kalowski (2.1 percent).

Anything can happen—or not happen—with this IPO, of course. Imprivata operates in a very competitive health IT and enterprise software market that includes big players like Microsoft and Oracle. But it would be fitting for a Boston tech company to go public at the intersection of healthcare and security, two long-time strengths of the region.

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