Arcot Systems

About Arcot Systems

Arcot Systems, founded in 1997, established itself as a significant player in the digital security space, specializing in advanced authentication and fraud prevention. The company's solutions, which could be deployed either on-premises or through the cloud, were instrumental in securing online transactions, reportedly preventing fraud for approximately one million online credit card transactions daily prior to its acquisition. The business operated on a subscription-based model, which cultivated a strong recurring revenue base with high customer retention.

The firm was founded by Ram Varadarajan, who also served as its CEO. Under his leadership, Arcot raised a total of $62 million over four funding rounds, with notable investors including Goldman Sachs, Invesco Mutual Fund, and Vedanta Capital. A pivotal moment in the company's history occurred in August 2010, when it was acquired by CA Technologies for $200 million in an all-cash transaction. This acquisition was a strategic move for CA Technologies to bolster its Identity and Access Management (IAM) portfolio, integrating Arcot's technology with its own CA SiteMinder offerings to provide enhanced security and compliance capabilities, particularly for the financial industry. Following the acquisition, Arcot's technology continued to be developed and is now part of Broadcom's payment security division.

Arcot's product suite was designed to provide robust, software-only security solutions. Key offerings included Arcot WebFort, a versatile authentication server that used a software credential called ArcotID for two-factor authentication without requiring client-side software installation. Another core product was Arcot RiskFort, an adaptive authentication solution that performed real-time risk analysis of online transactions by evaluating data points like device information and location to generate a risk score. This system allowed clients to set policies to approve, deny, or require further authentication based on the calculated risk. The company also offered Arcot TransFort, a payment authentication solution for merchants participating in programs like Verified By Visa and MasterCard SecureCode. Today, the technology powers the Arcot Network, a payment authentication network based on 3-D Secure (3DS) that serves over 5,000 financial institutions worldwide, helping to reduce fraud and increase payment approval rates.