ZscalerA cloud security company headquartered in San Jose, California, has acquired cybersecurity startup Avalor, 26 months after its founding. allegedly for $310 million in money and equity.
In a press release to announce Jay Chaudhry, founder and CEO of Zscaler, said within the news that the deal would expand Zscaler's platform with features including streamlined security incident reporting, incident containment, asset discovery, data classification, security policy creation and more.
“AI is barely nearly as good because the underlying data, and plenty of solutions lack the extra context and knowledge from data sources across the enterprise to actually leverage security-specific AI models,” Chaudhry said in a press release. “Zscaler operates the world’s largest security cloud with essentially the most relevant data to coach security-specific large-scale language models, and with the acquisition of Avalor we will more effectively discover vulnerabilities while predicting and stopping breaches.”
Raanan Raz co-founded Avalor with Kfir Tishbi, who previously led the engineering team at Datorama, a marketing analytics company acquired by Salesforce in 2018. Raz and Tishbi worked together at Datorama each before and after purchasing Salesforce.
Avalor acts as a source of truth for cybersecurity assets, controls, identities, vulnerabilities, errors and other data points, enabling security teams to aggregate, normalize, deduplicate and track risk data from discovery to remediation.
It's not a singular concept. A variety of startups like Securiti and Dig Security are tackling the identical problem. But what sets Avalor apart is its ability to process data from virtually any source in any format and its unique tools for vulnerability risk management and prioritization.
Prior to the Zscaler acquisition, Avalor managed to secure $30 million from investors including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts. And Raz expects Zscaler to proceed to drive the corporate – and its team of around 80 people within the US and Israel – forward.
“(With Zscaler) we gain immediate access to a set of resources that may have taken us years to develop organically – 7,000 customers, 4,200 channel partners worldwide, near-ubiquitous customer awareness, and the validation of a $2 billion business behind us. “Raz wrote in a single post on Avalor's blog, posted Thursday morning. “We will proceed to operate independently as a full Avalor team, with the backing of great Zscaler resources to assist us.”
Avalor is Zscaler's third acquisition after Canonic, a startup focused on cyberattack protection on software-as-a-service products, and Trustdome, a cloud infrastructure permissions platform. Zscaler was founded in 2007 by Chaudhry and K. Kailash and went public in March 2018. The company has about 7,000 employees and a market capitalization of about $30 billion.
As Chris Metinko from Crunchbase written down Earlier today, the acquisition of Zscaler — together with others within the cybersecurity space — could help boost activity in a slow to stagnant cyber M&A market. Last yr, there have been just 66 M&A deals involving VC-backed cybersecurity startups, based on Crunchbase – a 26% decline from 2022 (89 such deals) and greater than a 50% decline from 2021 (139 deals).
There have been 18 cybersecurity-related mergers and acquisitions up to now in 2024, with Wiz, SentinelOne and CrowdStrike making particularly notable moves.
