San Jose, California-based cloud security company Zscaler has acquired cybersecurity startup Avalor for a reported $310 million in cash and stock, 26 months after its founding.
In a press release announcing the news, Zscaler Founder and CEO Jay Chaudhry said the partnership will expand Zscaler's platform to enable efficient reporting of security incidents, Security mitigation, asset discovery, data classification, security policy generation, and other capabilities will be expanded.
“AI is only as good as the underlying data, and many solutions lack the additional context and knowledge from data sources across the enterprise to truly leverage security-specific AI models.” Dolly said in a press release. “Zscaler operates the world's largest security cloud with the most relevant data to train security-specific large-scale language models. With the acquisition of Avalor, we are able to predict and prevent breaches while , allowing us to more effectively identify vulnerabilities.”
Raanan Raz co-founded Avalor with Kfir Tishbi, who led the engineering team at marketing analytics company Datorama, which was acquired by Salesforce in 2018. Mr. Raz and his Mr. Tishbi have worked together at Datorama leading up to and following the Salesforce acquisition.
Avalor serves as a source of truth for cybersecurity assets, controls, identities, vulnerabilities, bugs, and other data points, enabling security teams to aggregate, normalize, deduplicate, and track risk data from discovery to remediation. I'll make it.
It's not a special concept. A number of startups are tackling the same problem, including Securiti and Dig Security. But what sets Avalor apart is its ability to process data from virtually any source, in any format, and its unique set of vulnerability risk management and prioritization tools.
Prior to the Zscaler acquisition, Avalor successfully secured $30 million from investors including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts. And Raz wants Zscaler to further evolve the business and its team of about 80 people across the U.S. and Israel.
“[With Zscaler, ] We have a set of resources behind us that would have taken years to develop organically: 7,000 customers worldwide, 4,200 channel partners, near-ubiquitous customer awareness, and You now have instant access to validation for a $2 billion business,” Raz wrote in the post. In Avalor's blog published Thursday morning. “We will continue to operate independently as a complete Avalor team and have all the tailwinds of his incredible Zscaler resources to help us.”
Avalor is Zscaler's third company after Canonic, a startup focused on protecting software-as-a-service products from cyber-attacks, and Trustdome, a cloud infrastructure entitlement platform. This will be an acquisition. His Zscaler, founded in 2007 by Chaudhry and K. Kailash, went public in March 2018, has about 7,000 employees and a market capitalization of about $30 billion.
As Crunchbase's Chris Metinko pointed out earlier today, the acquisition of Zscaler, like others in the cybersecurity space, could spark activity in the stagnant cyber M&A market. According to Crunchbase, there were only 66 M&A deals related to venture capital-backed cybersecurity startups last year, down 26% from 2022 (89 such deals) and 50% from 2021 (139 such deals). It has decreased by more than 20%.
There have been 18 cybersecurity-related mergers and acquisitions so far in 2024, with the most notable moves coming from Wiz, SentinelOne, and Crowdstrike.