Six years after it acquired LassPass for $110 million, LogMeIn says it will spin out the unit as a separate cloud security specialist
LogMeIn’s password and account management division LastPass is to be spun off from its parent company, six years after its acquisition.
It was back in October 2015 when LogMeIn initially paid $110 million in cash for LastPass, and its its signature password management service that helps users create strong, secure passwords for websites.
Now LogMeIn has announced it will establish LastPass as an independent cloud security company, citing strong market demand as the reason.
LastPass is currently used by more than 30 million users and 85,000 businesses worldwide, and LogMeIn claims it is “set for strong and sustained growth as consumers and businesses continue prioritising password security.”
“By establishing LastPass as a standalone business, the company plans to increase investment in the customer experience, go- to-market functions and engineering to accelerate its organic growth in password management, Single Sign-On (SSO) and Multi-factor Authentication (MFA),” it said.
“The substantial scale of LastPass, its tremendous growth, and its market leading position and brand makes it a perfect candidate to seize new opportunities as its own standalone company,” said Bill Wagner, President and CEO of LogMeIn.
It seems that currently the majority of LastPass’ business is represented by corporate customers, indicating the rising importance of identity verification, as more and more people are having to contend with multiple password-protected services, coupled with the prevalence of unauthorised access by hackers.
And of course the Coronavirus pandemic has also meant that many people are now working remotely and having to log in securely to their back-end systems located in corporate offices and data centres.
Private equity owners
The spin off also makes sense when you realise that the owners of LogMeIn (and therefore LassPass) are private equity firms.
“The success we’ve seen across the entire LogMeIn portfolio over the last 18 months proves there is a vast growth opportunity ahead for both LastPass and LogMeIn,” said Andrew Kowal, Partner, private equity outfit Francisco Partners.
“We assessed our portfolio with a laser focus on unlocking the full potential of our business and identifying how we could best serve customers and accelerate growth across very different markets,” said Kowal.
In 2018 LogMeIn made profits of $446m on revenues of $1.2bn.
But in 2019 LogMeIn was sold for $4.3 billion to Francisco Partners and Evergreen Coast Capital Corp.
LogMeIn now reportedly made over $1.3bn in annual revenue in 2021 (no word on profit) and LastPass is said to have managed a 50 percent compound annual growth rate over the last three years.
It should be noted that Francisco Partners also owns Citrix’s GoTo business.